Microsoft’s Live Local launched this morning, and we’re really beginning to see a three-way features race bewteen Redmond, Yahoo and Google to outdo each other. Basically, Microsoft has taken taken its Virtual Earth maps service and added several features, such as more advanced driving directions, custom push pins for people who want to mark certain locations and something called dynamic routing, which allows you to use to use a map-click (sans address) as the starting point for your driving directions.

Most compelling, though, is Microsoft’s bird’s eye view, which the company talked about earlier this year but is now just releasing. Bird’s eye gives you a slightly angled, 2,500-foot aerial view of cities, in contrast to Google Maps’ top-down-only view. It’s enough of a difference to let you see the architectural features of a building and to get a decent sense of landmarks and neighborhoods. Pictometry is providing the images for Microsoft. So far, 25 percent of the U.S. population – or about a dozen major cities – is covered by bird’s eye.

The cost for such imagery must be huge, and we wonder how long Microsoft will be able to justify the expense. Nonetheless, Microsoft’s Angela Morrow told us yesterday that the images will be updated “as often as we can.”

There are several other features. Since it launched Virtual Earth earlier this year, Microsoft has made it real easy to build custom maps and share them with friends through email, etc. But, per usual, don’t listen to us. Go play yourself.