Microsoft late last week announced that it was dramatically altering its course on PC-to-PC sync and reversing an earlier branding decision. Now, the PC sync technology in Windows Live Essentials will be named Windows Live Mesh, not Windows Live Sync, and it will take on some of the dropped features from the previous version of Live Mesh.

In a briefing, Dharmesh Mehta—Microsoft's director of Windows Live product management—explained the changes, which fall into a handful of simple categories. But it's worth stepping back for a moment to understand where this all began. For the past several years, Microsoft has had two competing PC sync solutions, Live Mesh (not Windows Live Mesh) and Windows Live Sync. Live Mesh was in a perpetual beta state and was the superior product, whereas Windows Live Sync was part of the Windows Live Essentials suite and was thus more broadly distributed.

When Microsoft began work on the latest version of this suite, Windows Live Essentials 2011, it decided to consolidate the two services. So, it based the new version of Windows Live Sync on the superior technologies from the old Live Mesh. However, it dropped some key Live Mesh features, including a web desktop and visual ornamentation for synced folders. And it dropped the available web storage from 5GB in Live Mesh to 2GB in Windows Live Sync.

This latter move was perhaps the most aggravating to Live Mesh users, though Microsoft has insisted that few users ever took advantage of more than 2GB of web storage anyway. (More problematic: Microsoft offers fully 25GB of free web storage via Windows Live SkyDrive but inexplicably does not link that storage to Live Mesh/Windows Live Sync.)

Under the original plan, then, Live Mesh would have disappeared as a brand, and Windows Live Sync would have continued on. But the new Windows Live Sync would have been based on Live Mesh technologies.

Now, that's changing, and Microsoft is bringing back some dropped Live Mesh features. And in the final version of Windows Live Essentials, due before the end of 2010, Microsoft will rebrand Windows Live Sync to Windows Live Mesh. "The Sync name created some confusion for people because of other Microsoft products with the Sync name," Mehta told me. "And customers had really grown to like the Mesh brand."

Windows Live Mesh will pick up a handful of features that were previously available in the old Live Mesh, including the ability to sync hidden files and more detailed information about files that have not synced. Performance and overall quality is going up big time, with remote desktop access in particular seeing massive gains, with an 80 percent reduction in rendering times. And Microsoft is upping the web storage allotment from 2GB to the previous 5GB level from Live Mesh.

These changes should address the biggest complaints. But Microsoft's decision to fence off Windows Live Mesh storage from the far larger SkyDrive storage pool will likely continue to rankle those who would in fact use that storage if it was accessible. Microsoft's data does show that people use only tiny amounts of online storage in tandem with Live Mesh/Windows Live Sync, but that's almost certainly because that data is based on observing people's behavior under a severely limited storage ceiling. It's no wonder no one used it: 2GB of storage is almost worthless.

For Microsoft, the issue is cost. Windows Live Essentials, Windows Live Mesh, and Windows Live SkyDrive are all free services, and if Microsoft made it too easy to sync information with 25GB of storage space, many customers would actually use that storage, saddling Microsoft with huge storage expenses in its data centers.

Perhaps that limitation will disappear in the future as well. For now, however, Microsoft's Windows Live Mesh mulligan should at least silence the most common criticisms. And it certainly makes Microsoft's PC sync service—now called Windows Live Mesh—if not perfect, more valuable.