@RodAtWork: I'm a big Mesh Remote user too... No, the current version of the SkyDrive app for Windows doesn't do that, the remote desktop, at all. You can use it to access files on remote machines, but not a "real" remote desktop.
But they two do play nice together. I've got them both installed on a few Win7 machines (both x86 and x64) and Live Mesh still works just like it has before with no issues or conflicts. I'm personally beginning to move my file sync'ing from Mesh to SkyDrive, but will keep Mesh around for as long as I can just for its Remote Desktop functionality.