There’s an update to the Windows Azure SDK, version 1.1. The SDK extends Visual Studio 2008 and the upcoming Visual Studio 2010 RC making it easy to develop, debug, package and deploy Windows Azure Applications.

There’s a number of new things and a handful of bug fixes from the 1.0.

From the download page:

• Windows Azure Drive: Enable a Windows Azure application to use existing NTFS APIs to access a durable drive. This allows the Windows Azure application to mount a page blob as a drive letter, such as X:, and enables easy migration of existing NTFS applications to the cloud.
• OS Version Support: Allows a Windows Azure application to choose the appropriate Guest OS to run on in the cloud.
• Bug Fixes
• StorageClient: Expose account key from storage credentials, expose continuation tokens for pagination, and reduce maximum buffer size for parallel uploads.
• Windows Azure Diagnostics: Fix path corruption for crash dumps, OnDemandTransfer now respects LogLevelFilter.
• VS 2010: Improved packaging performance.
• VS 2010: Support for linked files in Web projects.
• VS 2010: Support for ASP.NET web project web.config transformations.
• Certificate selection lists certificates from LocalMachine\My instead of CurrentUser\My.
• Right click on Role under Roles folder to select whether to launch the browser against HTTP, HTTPS or not at all.

Windows Azure Tools for Microsoft Visual Studio includes:

• C# and VB Project creation support for creating a Windows Azure Cloud Service solution with multiple roles.
• Tools to add and remove roles from the Cloud Service.
• Tools to configure each Role.
• Integrated local development via the Development Fabric and Development Storage services.
• Running and Debugging a Cloud Service in the Development Fabric.
• Building and packaging of Cloud Service Packages.
• Browsing to the Windows Azure Developer Portal.

Download details: Windows Azure Tools for Microsoft Visual Studio 1.1 (February 2010)