Nigel Ellis one of the architects on the SDS team gave a very intressting talk at Mix09 which you can view here:
What's New in Microsoft SQL Data Services - MIX Videos
It's a talk that really doesn't present any really new fantastic technologies and that's the beuty of it all. The key take away from the session is that it most likely will just work provided your using the basic relational functionality of SQL Server.
You can expect to get your hands on a public CTP around July 09.
Some things that I found very intressting was the talk about data partioning that would let us use distributed queries in a very easy way. Also coupled with the data syncronization features (based on the sync framework) that will enable tight integration with onpremise instances of SQL Server, we can expect to actually start pushing out parts of our applications in cloud bursting scenarios (this was a headache for me prio this release it was simply not worth the effort on a exsisting application).
So what is not in v1: