Here's a post saying all the files may still exist in a hidden state inside Live Mesh. Definitely check this out first.
Excerpts from MSDN
Live Mesh is not deleting or losing
files. Even if they don’t all appear
in Live Mesh folders on your computer,
they are all present in a hidden
state, as well as on your Live Desktop
if the folder is synchronized there
Also don't uninstall Live Mesh
Uninstalling the Live Mesh software
from a PC will delete the files that
are in a hidden state on that PC. If
the folder is not synchronized on any
other computer or your Live Desktop,
then uninstalling will result in the
hidden files no longer being
Other Things to Try
This is why you keep real, non-beta backups of important data while using a beta product to work with your file system. Microsoft's Live Mesh Beta site clearly indicates the status of the product as beta. Sorry, the intention is not to chastise because it's like rubbing salt in the wound, but by Googling Live Mesh I see it has eaten other people's files. For example this and this. Knowing Live Mesh beta users will likely visit this question in the future it's worth noting.
Check the recycling bin - maybe the software moved them there. It appears as though Live Mesh has at some point used the Windows Recycle bin; whether or not the current beta does I'm unsure.
If you don't have other backups, check the other side of the synchronization channel to see if the files are still there. Would disable Live Mesh first though - but not uninstall it (just to ensure it doesn't propagate the deletions to other entities too).
Failing that use a standard file recovery tool, but do it quick before those deleted files are overwritten with other data. There might be products specific to undelete Live Mesh files.
It's funny the Live Mesh tagline is: Here, There, Everywhere
I think for liability purposes they should make the beta tagline: Here, There ...Nowhere