I didn't tested the account behavior on my own, but from what I read on the article mentioned from Wailer there seems to be no issue at all. Accounts are still created locally. Just use an email address as identifier and it doesn't even require online authentication for some services.
I actually use this since a long time with the Windows passport feature. My live ID is logged using my gmail account since the past 6 years.
Of course, you can also continue to use local Windows accounts as you always have and obviously, domain-administered accounts work as they always have as well.
So, although many people assume they will need to sign up for a new email account to get a Windows Live ID, it’s actually not necessary. In fact, many online services use a "string" like firstname.lastname@example.org to represent a user name, even though that string looks like an email address.