How to configure custom folder locations in SkyDrive
UPDATE
As per Confy's input below, it looks like sync behaviour is inconsistent when you set it up like this. For the moment I suggest not relying on this method.
The best alternative is to reconfigure your libraries. Andrew Rockefeller has written a great post on how to set this up here.
Live Mesh users may have noticed that the new SkyDrive client is limited to sharing one directory.
You can get around this limitation by using directory junctions.
A junction point behaves somewhat like shortcut and allows you to place links to multiple folders across your PC into your SkyDrive folder to be synchronized.
How to create a directory junction
Click on Start and type Command. 
Right click on Command Prompt and select Run as administrator 
Run MKLINK /J Link Target where link is the link name in your SkyDrive folder and target is the name of the destination folder.
For example to link the "Media" folder on SkyDrive to "D:\Media" you would use the command.
mklink /J "C:\Users\username\SkyDrive\Media" "D:\Media" 
The junction point will appear (and be synchronized) like a folder under your SkyDrive directory. 
To remove the junction point simply delete it from your "C:\users\username\SkyDrive" folder.

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