A post this weekend on msdn blogs from Yazan Rantawi explains how to get Live Mesh running on a Windows Server, and I just set it up with my Windows Home Server (which is Windows Server 2003 under the hood).  So far it seems to be working just fine.  Here’s what you do:

• Log in to your server (through Remote desktop, not the WHS interface), launch Internet Explorer, and browse to www.mesh.com. Sign in with your Live ID
• Add a device (you should be given the 32/64bit choice, make sure), and save (don’t run) LiveMesh.exe to somewhere easy to get to on your server (c:\downloads, let’s say)
• Turn off UAC if you are running Windows Server 2008 – you will be able to turn it on again after you install (more on the blog post)
• Again, for Windows Server 2008, reboot after turning off UAC (note: this is only necessary for Windows Server 2008, which has UAC)
• Now, from RUN, start cmd.exe, and navigate to the folder you have LiveMesh.exe in
• type in LiveMesh.exe /force, and hit enter
• Live Mesh will install normally.

Some screenshots:

I had no trouble with this, and a quick test has everything working well.  As usual, no guarantees that this doesn’t mess up Windows Home Server (or any server), so proceed at your own risk.

One note on WHS, trying to “meshify” a shared folders from the Shared Folders link on the desktop won’t work.  But, just navigate to your shares folder (d:/shares on my machine) and enable Live Mesh from there (right click on the folder, “Add folder to Live Mesh”).  After that, you will be able to get to synched files from the Shared Folders link on WHS or your WHS enabled machines.