For anyone who's seen and/or used TortoiseSVN 
knows how great it is and how informative the icon overlays are. In a perfect world, Windows Live FolderShare would take one from the Tortoise book and provide both context menu commands to manage sync'ed data and provide a visual identifier of what has been changed locally and needs to be sync'ed and even conflicts, if appropriate. Having this would be absolutely awesome.
Edit: A suggestion has already been made to provide "better shell integration." This doesn't go into the level of integration I'd like to see, but it's a start. We'll have to see how that matures.