With the launch of MSN Spaces, I figured I'd give it a try. My first impression is that it appears to be based off of SharePoint, which can be both good and bad. Good, because SharePoint is extremely configurable and powerful. Bad, because my past experiences with SharePoint have been poor with respect to speed and responsiveness. The fact that Spaces just launched and everybody's jumping on doesn't help, either. It takes forever to load up a member's page, and forget about trying to configure your own or add any content. I'm on a fairly fast cable connection, and things are slow as molasses. I shudder to think what the experience is like for dialup users.
Technical issues aside, Spaces seems to be targetted very much at the novice user. You have a very limited set of themes and layouts to choose from. The module selection is pretty good, but I don't really find much value in the "New Spaces" and "Updated Spaces" modules. Those belong on the Spaces home page, and not on a member's page. The "Updated Spaces" module would be very useful if you could give it a number of feeds to watch, but I don't believe that's possible.
As for the small number of themes, I think that conflicts with the personalization aspect. Themes are bad for personalization, you say? In this case, yes. Spaces only has some 24 themes to choose from, for a user base that likely already counts in the thousands if not tens of thousands. How many other people are using your theme? Worse, a large portion of them are "novelty" themes (flowers, frogs, rainbows, butterflies). There's a very small percentage of available themes I could actually live with for any period of time. I guess the ease of theming will make it easy to change when you get tired of a certain look, but you'll run through all of the themes fairly quickly and end up choosing from a handful with long-term staying power (that doubtless thousands of other people will be using, too). I don't know what Spaces' long-term plans are, but finer-grained theme customization really should be high on the list in my opinion.
For me, MSN Spaces is little more than a novelty, and I'll stick with Movable Type. It's not as new-user-friendly as Spaces, but it's infinitely more powerful. In time, Spaces could be good competition for Blogger or LiveJournal, but it's got some growing up to do first.