Still in beta, but better. Windows Live Writer Beta 2 is available for download:

http://writer.live.com/ [download]

http://windowslivewriter.spaces.live.com/ [blog]

A slightly refined look:

It finally has a way of saving the image settings from paste to paste:

Ahh. I was so tired of the defaults.

I like the program generally. Priced right: $0.00. Fast. Stable. Works.

I don't care for the glossy toolbar and buttons in the new version. Too much gloss for my tastes. :)