From the press release entitled Microsoft Adds 3-D City Models to Live Search we learn

REDMOND, Wash. — Nov. 6, 2006 — Microsoft Corp. today announced U.S. availability of Virtual Earth™ 3D, a new online mapping interface that is part of the Live Search offering, providing consumers with a three-dimensional experience to search, browse and explore the real world online.

When people visit Live Search (http://live.com), type a query into the search box and click the “Maps” tab, they get their search results in a map context that offers the option to explore the area using two-dimensional views (aerial and bird’s-eye) or three dimensional models with Virtual Earth 3D. This new technology compiles photographic images of cities and terrain to generate textured, photorealistic 3-D models with engineering level accuracy.

Again the VE team proves why they are my favorite team at Windows Live. The team has also blogged about the changes in their blog post entitled Spaceland is Live! which includes a screenshots. This is hot. I'm off to a launch party in a few hours here in SF and I can't wait to high five some of the folks behind this feat of technological sweetness.