Jim is correct in that Live Mesh is technically not support on Server product SKUs, though people have done it.
That said, since it is installed and you are generally able to use it, if you are experiencing a problem with some files in a Live Mesh folder not synchronizing from or to the machine, please file a bug report with logs.
How to Submit Bugs and Live Mesh Logs
-steve
Microsoft MVP Windows Live / Windows Live OneCare & Live Mesh Forum Moderator