A WebmasterWorld thread is reporting early signs of a major Microsoft Live Search update. The rankings, indexing and algorithm seems to have updated.
First reports came in from senior member, textex, at 9:30am (EST) yesterday. Since then, other members began to confirm the update. Old time member, Marcia, said:
A ten place drop from first to second page for the first site I checked isn't looking too appealing right now.
It looks like sites with a LOT of backlinks have risen to the top, I'm seeing some that have been ranking at Google for similar search terms, and have checked their link profiles in the past.
It'll take more looking, but I'd say it's definitely an update.
I checked my analytics and I see a major change for many keywords overnight from the Live Search referrals data. So I also can confirm seeing changes with Live Search.
The last major Live Search update we reported on was in July 2008.
Forum discussion at WebmasterWorld.