Receptional_Andy - 6:16 pm on Jun 21, 2008 (gmt 0)
I blocked msnbot with robots.txt on one personal site as an experiment and it feels great. Traffic is higher than ever because Live search is relatively insignificant.
I'm no fan of this behaviour (will you stop please, MS? I'm tired of having to get analytics software reconfigured to stop counting this automated traffic!), but your logic is kind of flawed. There's no possibility that blocking Live search will increase your traffic ;)