Browser Tests
As a quick test I searched for "firefox", "opera", "safari" and "internet explorer" in Windows Live Search, Google, Yahoo and Ask. Ignoring the sponsored results, Google and Yahoo brought up the browsers as the first result for all four and Ask had all but Opera as the first result, understandably putting it second behind the Royal Opera House. Live Search didn't put any as the first non-sponsored result, with "firefox" returning several suspicious non-Mozilla downloads. The "internet explorer" search in Live brought up the Firefox-directing www.ie7.com site.
It doesn't seem like Live is deliberately promoting IE over other browsers, it just isn't very good.