Thanks for the response. I appreciate the perspective. My district will be doing a comparison between the two products next year and we're in the pretrial period. I've had Google Apps up and running the past year for District Admins and a few teachers, but haven't worked with Live@EDU (mainly because it's new to the scene). Which ever option we go with should save us a good bundle.
My position in the district is eLearning Coach - so I spend a good bit of time working with two LMSs - Blackboard (for our High School) and Moodle (Middle School on down). Moodle is free and open sourced. Blackboard costs us about $19 a license. Both, essentially, do the same thing (tests, post assignments, discussion boards, submit papers, etc).
In my opinion, Blackboard is the worse program (based mainly on site navigation...no joke, it sometimes takes 15 clicks to get anything done...missing features, and it's slightly more difficult for students to learn). If you're going to pay a good chunk of cash for a program - it should blow the open source version out of the water. Blackboard doesn't. Kids really love and get Moodle. We've had a lot of success with it. We've been running it in district for 4 years, working out the occasional glitches and upgrades. We'll see what happens in the future, especially giving the financial Armageddon school districts seem to be facing.
The odd thing is that I could see Google Apps (which integrates w/ Blackboard and Moodle) and Live@Edu basically replacing a Moodle/Blackboard. The only thing Googe/Live is really missing is a test taking app!