Anyway, Om Malik got the same tour a few hours earlier so I'll just link to him and go back to working on stuff here at Microsoft (yeah, working late again, damn email is just flowing faster and faster).
Om, this isn't real full 3D yet. Your camera position can't move and you can't spin things like you can in Second Life (objects are flat, but look 3D because of opacity). That isn't taking away from what Max did at all. It's awesome.
Also, it does both Second Life and Hive 7 a disservice to compare the two. Second Life is a downloadable application. That means it'll be far richer than a browser-based application. But Hive 7 will get more users quicker because most people aren't willing to download an app and install it, especially if they perceive there isn't much value there (and for most people there isn't much value in these things — yet).
Oh, and the backend? It's running on Windows Server 2003 64-bit. I'm noticing a trend lately — more and more cool stuff on the Web is running with Windows as a backend (MySpace announced last week that they were running on the same). Max says he can't yet afford to build out a huge datacenter so if too many people show up all at once they might not be able to get in.
If you get an opportunity to play with it, do, it's a lot of fun and even if you don't end up a long-term user you'll appreciate what a browser can do a whole lot more. Works on IE and Firefox.