Phil Haack:
The sample project Jim posted has some fixes to the project that allow it to work in the actual cloud. There were a couple of minor bugs regarding rendering URLs with port numbers when using our form helpers (already fixed in our trunk) that would not affect most people, but does happen to affect running in the cloud.
Azure makes it possible for me to reuse my existing skills as a .NET developer who is savvy with using RESTful APIs to build cloud based applications without having to worry about scalability concerns (e.g. database sharding, replication strategies, server failover, etc). In addition, it puts pressure on competitors to step up to the plate and deliver. However you look at it, this is a massive WIN for Web developers.