Just a few days ago Microsoft Epression Blend RC was released and now Expression Design beta 2 is available for download.
The first beta of Design was a real disappointment for me, since all pixel editing and all Live Effects was removed. Beta 2 is still only vector editing but the Live Effects are there. The focus seems to be the Design/Blend/XAML/WPF integration to start with, which is fine but the technical previews of Design (then called Interactive Designer) really had it wen you could combine vector and pixel layers.