MSFN is reporting that MS confirmed the online storage service at a blogger’s breakfast in Sydney, Australia.

Speaking at a blogger’s breakfast prior to the opening of Tech.Ed in Sydney, Microsoft Australia technical specialist John Hodgson said that the basic Live Drive was likely to include around 2G of storage for free. Additional storage capacity would be available for purchase, though pricing schemes and final release dates haven’t been announced.

It’d be nice if this were true, guess we’ll wait this one out to see.