We are currently being warned that Google Apps does not fall in line with one of the main rules of the Data Protection Act.
"Personal data shall not be transferred to a country or territory outside the EEA unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data."
Google won't tell us where the data is held so this is a problem. Not sure if Live@edu would be a similar issue.