Steve Millet is talking about the improvements in the Indigo model for security tokens.  The good news is that the madness has stopped: when a UsernameToken is validated you only need to return a bool rather than the password.  WSE 1.0 and 2.0 require the password to be returned allowing WSE to work out whether they match.   This was uncomfortable for several reasons, such as the fact the password might have been hashed, or just the fact that sharing the password back with the framework feels like a 'boundary violation'.  I'm glad that we're seeing the end of this bizarre API practice.

Other interesting tidbits were that SAML tokens will be available in Indigo.  Now, if they were only in WSE ...

Existing WSE/ASMX applications are likely to have a good upgrade path to Indigo, with similar security attributes.  There are also extensibility hooks in Indigo to do custom security token handling, so there's an upgrade path for WSE (though this is almost certainly having to write code).