Microsoft have just updated all three prongs of the Virtual Earth API: the JavaScript AJAX control, the Web Service, and the 3d Control. Updates for the first two are automatic. End users of the 3d control will have to download a new plugin.

Updates include native support for IE8, new high-efficiency custom layer methods (AJAX), improved international geocoding & parsing, improved efficiency for the 3d control, custom DEM data. Further details from Chris Pendleton's announcement:

Here’s a little breakdown of the new features for your reading pleasure:

Native Support for Internet Explorer 8 – with the release of Internet Explorer 8, you can now expect the Virtual Earth AJAX map control to function as expected. Download the latest version of Internet Explorer (8).

New Virtual Earth AJAX Map Control Methods – 2 new methods for advanced users to speed up performance and give control over rendering HTML elements on the map.

• AddCustomLayer() – AddCustomLayer allows you to add pushpins to a DIV and then add the DIV to the map control. There are some significant performance improvements for doing it this way. See sample code at the end of the blog post.
• RemoveCustomLayer() – RemoveCustomLayer() allows you to delete the DIV and all it’s elements that were added as a part of AddCustomLayer(). See sample code at the end of the blog post.

Geocoding and Parsing Improvements – our international users will be ecstatic with the geocoding and parsing engine improvements in addition to our new spatial geocoder which helps with accuracy of place name matches for locality queries. The countries / areas where improvements will be noticeable include United Kingdom, France, Germany, Italy and Spain.

Extended Local Listings – in addition to our current United States local listings available in the Virtual Earth AJAX map control and Virtual Earth Web Service, we’ve extended the indices available in the map control to include listings from France, Italy and Germany.

New 3D Control – an upgrade of the Virtual Earth 3D control will be required to get access to the performance benefits and new features associated with the new 3D control. The performance benefits include compression of building textures for all 1.4 million buildings in the Virtual Earth 3D control (yes, 1.4 million). There are no changes or deletions for the public API for the following assemblies: Microsoft.MapPoint.Data.dll, Microsoft.MapPoint.Geometry.dll, Microsoft.MapPoint.Rendering3D.dll, Microsoft.MapPoint.Rendering3D.Utility.dll, Microsoft.MapPoint.UtilityPartialTrust.dll - redirects are included within so as not to break any applications that may be leveraging them. As always, expect some code samples from the Virtual Earth 3D Team’s Blog. As for new features, here’s an exhaustive list:

• Anisotropic Filtering – This will greatly reduce blur and preserve detail at the 3D control’s extreme viewing angles. This is now an option in the 3D preferences on Live Search Maps (go to Live Search Maps, click options, click 3D Settings, check the box for “use anisotropic filtering").

• Initialized event - A single event on RenderEngine that simplifies the startup scenario.
• Digital Elevation Model data - The ability to supply custom DEM data, and have it automatically stitched into existing data.

• ILocationListener - An interface that allows automatic and efficient query of a location to determine elevation as data changes.
• Synchronous rendering - Manual render functions that allow use of a custom render thread, good for offline rendering or incorporation into another product.
• Datasource ConnectionParameters - Helper function for specifying data sources without a content manifest.
• CelestialStyle - Allow display of a stylized sky with constellations (used in Road Mode on Live Search Maps).

• Versioning - Support for running code built against previous control versions, if it meets certain requirements.
• Pixel-width lines - GeometryManager supports pixel-width 3D lines (previously only single-pixel or meter-width).  Also nice looking text labels.
• Constant value datasources - Helper functions for supplying flat color or elevation data.
• Terrain Scaling - This works now.

• Override OnPaint - Can replace the loading screen.
• Building Culling Value - Allows control of how many buildings are displayed, based on distance and size of the buildings.
• Turn on/off street level navigation - Can turn off some of the special effects that occur when right next to the ground.

Updated Software Developer Kit – the Virtual Earth AJAX map control SDK on MSDN has been updated to reflect all of these changes.

Chris Pendleton's full blog announcement, including sample code, can be found here.