Hi,
It seems you are right, the Windows Live Web Authentication SDK page says it will become obsolete and Live Connect will be the replacement. It is a royal pain how these big providers keep changing/breaking/deprecating/removing their apis and making us re-write code. I'll add a to do item in our project tracker to look into implementing the newer Live Connect, but not sure how soon I can get to that.
In the mean time my suggestion would be to use the Janrain Engage Single Sign on Solution which we also have built in support for in mojoPortal. It supports Windows Live in addition to other social auth providers and they handle any backend changes to the supported apis so we don't have to.
Best,
Joe