you can make areas on your site using the passport system for authentication
javascript solution (you can probably google something that would provide what you are looking for)
everytime you add a user you have to rewrite the script with javascript (update it to include the new username/password)
windows live id sdk can be used to create a solution that theoretically can be used to verify against passport/live id servers.
a download site for the sdk is available. Support for Office Live via email or phone will not be available because this is far far out of the support line, and will require some serious programming skills to use it.
for the sdk you can find further information regarding this with this link http://msdn.microsoft.com/en-us/library/bb404787.aspx
good luck. you'll most likely need it.