See:
http://social.microsoft.com/Forums/en-US/LiveMesh/thread/e22e0115-98d1-47eb-b495-ff3e10acb0a6
I had that on one machine and manually removing the registry keys and files and folders for Live Mesh beta was the solution.
You may want to go to the forum for Windows Live Mesh as I am sure that others have encountered this issue, too:
For discussion of the new Windows Live Mesh (formerly Sync), (as well as the released Live Sync version) go here:
http://windowslivehelp.com/forums.aspx?productid=24
-steve
~ Microsoft MVP Windows Live ~ Windows Live OneCare| Live Mesh|MS Security Essentials Forums Moderator ~