Moving a library folder to SkyDrive
There's something very powerful about having a simple folder that just syncs everything in it to the cloud. In Windows, there are some special folders, libraries that have different characteristics to a regular folder. You can't just move them like a regular folder into Skydrive (or anywhere) and retain their functionality. Just drag/dropping these folders will result in a copy being created. That will not transfer the properties, it won't make the new folder be the default save location for your files, your system won't search them for content by default... but there is an easy way. Here's how you move a default user library folder and retain all functionality.
Think about what you want to move beforehand
Step one is always to back up anything important, that's just common sense.
Now.. think about what you want to move to Skydrive before you do it. For example, moving your entire My Documents directory might not be a good idea. The My Documents folder can also contain files for software on your system. Although it won't necessarily break the software, this could be awkward/inappropriate if you are using SkyDrive on multiple systems running the same software or result in unnecessary files being synced. Alternatively this also could be a massive advantage depending on your needs, so just think about it first.
If you just want to put your personal documents in the cloud, you can always just move a folder from within your documents folder to the SkyDrive folder, then include that folder in your documents library. This is possibly a better usage model for many situations. If adapting is not your strong suit, you can create a shortcut to the folder (now in your SkyDrive) and put that wherever you like.
On with the Tutorial...
Here I'm going to move the My Pictures default library folder. Pictures are a benign filetype and moving this library to SkyDrive actually makes heaps of sense. So here we go...
Start by creating a new folder in your SkyDrive directory and rename it appropriately. Here I've created and named a folder "My Pictures".
1) From the Start menu, open your personal files.
2) Right-click on the folder that you want to move and select 'Properties'
3) Select the 'Location' tab.
4) Click 'Move...'
5) Now navigate to the folder you created in your SkyDrive folder, select it and click 'Select Folder'.
'Apply Changes' and confirm to complete. It's that easy.
Your My Pictures folder should still appear in you personal files view, but now it has a SkyDrive sync indicator on it!
If you are using SkyDrive across multiple systems, you might want to repeat the process for each system so they all see the same files in the same way with changes reflected on all.
Good luck, and if you haven't yet moved your Favorites folder (IE bookmarks) to Skydrive, I suggest you go do that now. IE9 finally got bookmark syncing ;)