LiveDeal, the Palo Alto-based online classifieds start-up is apparently on the trail (sub req) to raise between $7 and $10 million in its first venture capital round. We first wrote about LiveDeal here. Our two cents: It’s going to be tough for LiveDeal to succeed in a market where there are lots of players, including big incumbents like Craigslist and eBay. We wrote about ZiXXo, of Belmont, here. And Oodle, of San Mateo, is the latest example. But more interestingly, we’re wondering how forgiving the VC community will be of one of LiveDeal’s executives, Steve Harmon, who helped throw venture firm Hummer Winblad into quite a bit of turmoil after the Bubble burst in 2000. Check out this story for the details. Contrast that with how Harmon is positioning himself (scroll down) at LiveDeal.

According to VentureWire, LiveDeal has just struck a marketing deal with AutoNation which lets the car retailer “list its 20,000 used vehicles from more than 280 dealers on LiveDeal’s Web site. The agreement also gives AutoNation, a public company, the exclusive premium placement on in all its local market for $500 paid by the local dealer or franchise.” So far, Navar invested about $3.5 million in the company.