Released today, a new version - get it here. They have added the following (list extracted from the Windows Liver Writer blog post)

The following is a summary of the changes in the Writer 1.0 (Beta) Update:

• Tagging support
• Support for Blogger Beta
• Categories are sorted by name and support scrolling, plus improved support for reading categories from your blog
• Improved startup performance
• Paste is enabled for Title region and TAB/SHIFT+TAB navigation between title and body supported
• Insert hyperlink added to context menu when text is selected
• Title attribute in Insert Link dialog
• Custom date support for Community Server
• Improved keyboard shortcuts for switching views
• Change spell-check shortcut key to F7
• Add ‘png’ to insert image dialog file type filter
• More robust image posting to Live Spaces
• Improved style detection for blogs 
• Fixed issues with pasting URLs and links
• Remember last window size and position when opening a new post
• Open post dialog retrieves more than 25 old posts

From what I have noticed :-

• It still takes an age to open.
• There is still no support for adding a file to a post (and having it uploaded / FTP'd), so my 'Insert File (via FTP) plugin' is still valid.
• There is still no support to add new categories (you can choose from existing categories)
• The insert 'task box' does not provide a scrollbar (so some items get hidden as you create more drafts)

Other things I noticed about the SDK when writing my plugin :

• No way to get a ref to the current blog provider
• No way to get properties for the current blog (this would be great as my plugin would be able to automatically pick up the FTP settings)
• The icon size for displaying on the Insert tab is a crazy 20x18. Why didn't they simply go with a standard size (16x16 for example).

See 'Insert File (via FTP) icon on the embedded image for how it looks when trying to scale a standard image to this custom size - AWFUL.

However, I can't complain, overall I'm pretty happy - it's FREE, it makes my post creating MUCH FASTER and the way it shows me how the post will look on the website (automagically using my website CSS / formatting) is just AMAZING