If your firewall (Vista) is off, according to your operating system's security centre, then it *should* be off. The process (service) is part of something bigger - One Care Live ... a whole different beast. If you installed this then you might want to look at various reviews on the web.
I won't touch anything like this from MS because, in my own experience, they are buggy and cause problems with other programs. I won't use the Live toolbar for the same reason ... it's a dog with fleas.
Your thinking is excellent and on the right track ... no, it is most unwise to run two software firewalls at the same time. Any reasonable software would detect the existance of others and let you know OR disable them (which is what NAV does).
Interesting ... kinda gives a wam glow when you think about MS, huh? I wonder if it may be related to the Live tool bar or latest flavour of messenger (which has a slew of neato tools - bogger, photo gallery, email client etc). I use Office Pro 2007 and among the avalanch of upgrades and addons, I stumbled across MS's version of cloud computing which is a topic waaay beyond this forum. Anyway, you get about 2 gig of storage to put office compatable files which can then be accessed and updated by your nominated group. I don't think you even need office.
It's possible that we may all be moving towards cloud computing because of the benefits (centralised, world wide, simple access etc). On the other hand, no such thing as a free lunch. Hackers have broken into this forum, Symantec and Microsoft and every other major IT player in the world. How tempting would it be to have all of a company's records stored in one location (in the ether of the web)?
Off topic ... sorry.
Perhaps you might have some nasty surprises from Live toolbar, Spaces or Messenger?
So long as you have a software firewall then it *should* be safe to shut down the service ... you can do this manually to see if any smoke comes out the back of your system :) If you see no major alerts / warnings and your regular firewall is still ok then you might consider altering how this service starts ... from automatic to manual? If nothing else, so long as this causes no unexpected problems, you free up system resources and minimise potential conflicts.