I'm using Live with a sort of jam/hip-hop band (drums, bass, guitar, rapper) to run some loops as accompaniment sequences, and also, more interestingly, to capture live loops of the musicians (currently just rapper and guitarist until I get more inputs) and modify them with effects and envelopes to build new sequences on the fly during jams. The envelopes are cool for quickly looping just parts of a live loop, or changing up the rhythmic character. I also really like the built-in Live Granular Delay effect which can really change up the sound and feel of a loop in a smooth way - cool for slow morphing.
There are some features that Ableton could add to make Live easier to use for all of this, but overall it's really cool and fun. But I'm pretty new to all of these various programs, so I don't know what else I'm missing by using Live at this point! :)
I've got Live sync'ed to the tempo-tracking software I've been developing, so it follows the drummer. I'll be performing (with Knoble1) and demo'ing all of this at the Philadelphia Electronic Music Arts Festival this weekend:
Come by and say hi!