Its bit hard for me to digest that IBM being the WS-Federation standard founder went for a deal with France telecom (one of the founders of Liberty alliance) to conform to Libery standard for identity federation. Not to mention that Libery group members must also be in uncomfortable position as IBM being competitor in the authoring the federation standards.
Read more about the contract here.
At Burton catalyst last week to whomsoever I talked about the religious war between libery and WS-Federation every body has an opinion that they should merge. Most of them were looking to support both though.
.NET SmartCard will be supporting both the standards but definitely its a pain for vendors.