A recently published Q&A piece by Microsoft on Live Mesh/Live Sync and the changed that comes with it confirmed that the service as rolled out will no longer support Windows Mobile handsets:
Q: Why can’t I sync folders on my mobile device?
A: With this release of Windows Live Sync, we focused on syncing folders between computers. In the future, we’ll explore adding support for other devices including mobile phones.
Fortunately Microsoft has not ruled out future support, but unfortunately “exploring adding support†lacks any clear commitment.
Via the All about Microsoft ZDNet blog.