Alex Media
Are you really sure you want to do this The Client SDK is currently in alpha-stage and is probably unsupported in a production environment.
In a video on Channel9 Lynn Ayres (PM for Windows Live ID, if I remember correctly) said that a lot of things will change in upcoming versions, so be sure this is what you want to do! It's possible that you'll have to rewrite your entire application because of changes in the Live ID Client SDK.
However, if you want to do this, I think (not sure though) it should be enough to put the LiveID.dll-file (or whatever it's called, I have never used the SDK) in your application folder on the target machine...
But since this is still an alpha-version, I'm sure the team will come up with a working solution for this particular issue...