I created a Windows Live ID on my desktop (using @gmail.com), then went to Photosynth.net on my PC and created a userID. Then I attempted to login via my iPhone 4. After entering my Windows Live credentials, I was prompted to *create* a Photosynth userid. No matter what I enter - my real Photosynth ID or something completely different and random, I get the error message "Failed to create Photosynth.net user". It doesn't tell me why (e.g. userid already exists, etc.). I have waited a couple hours and tried it again on the iPhone, with the same results.
The iPhone app seems to work great except for that. I've create a couple of synths stored locally and the app views them just fine. Just can't upload.