I downloaded and tested the Expression Web Designer software.
It is a very large download - 224 megabytes, plus the .Net framework. You have to have a Microsoft Vista ID (existing MSN IDs will work) to download the package. It took me about a half hour to teach myself how to use it reasonably efficiently; full mastery would take much longer.
It is very similar to Frontpage in look and feel. The main editing window is WYSIWYG and there is access to a code window. The interface takes a bit of getting used to - Microsoft has not improved in the area of usability, which is unfortunate (eg. when the split source-WYSIWYG screen appeared, I found no way to minimize the source window - you have to select from the 'View' menu item dropdown (and presumably there is a keystroke command).
Pages are designed using CSS and standard HTML elements. Access to Microsoft controls and database services (ASP) and Sharepoint services is also enabled. The HTML code isn't bad. It is much cleaner than that produced by Frontpage and I didn't spot any obvious errors (no doubt many bugs will be found, but that would be normal for an early release of a system of this sort).
For the price (the download is currently free) it's pretty nice software, especially if you're not comfortable flinging HTML code around and especially if your comfortable in a Microsoft environment. Somebody working the server backend (databases, etc) can very easily set up this product to allow non-technical people to design complex websites. I didn't see any explicit support for Web 2.0 - that would have been a nice touch but will probably be included later as a module or update.
For myself, it probably isn't the way I would go (and I have in fact uninstalled it from my laptop). It is (not surprisingly) Microsoft-centric and so wouldn't help me a lot building (say) Drupal sites or Blogger templates (these would be *very* nice modules to add to a program such as this). But for people who are already working in a generally Microsoft environment, I wouldn't hesitate to recommend it.
The main thing I would add were I developing the product is a very easily accessible set of designs or templates. It wasn't clear to me how all the different commands and controls could combine to create a web page; these tem plates would make that clear, and also give designers a good starting point.