I've been having the same problem as many others with the mandatory update.  I cannot send or reply to emails.  I get the Failed to Initiate Shared Canvas message.  I tried the steps to delete Live Essentials files, and I also Uninstalled Windows Live Essentialsm..  But four files wouldn't delete out of C:\Program Files\Common Files\Microsoft Shared\Windows Live Essentials: SQMAPI.DLL, WLIDNSP.DLL, WLID.SVC  and WLIDSVCM.  All said they were open in either Live ID Sign-In Assistant or Audio Sign-in.  Nevertheless, I reinstalled Live Essentials and am still getting the same message.

Come on Microsoft.  How do we fix this mess.  I would like to be able to send emails.