Apparently, LiveUpgrade won't be opensourced, or included in "Indiana", but there is a ZFS aware replacement in the works:
BE Utility for Snap Upgrade
The BE utility is the user interface for managing Boot Environments and is the replacement for the Live Upgrade commands (luupgrade(1M), lucreate(1M)...) This utility is intended to be used by System Administrators who want to manage multiple Solaris Instances on a single system. The BE utility will be implemented with ZFS support only, however a migration path from UFS to ZFS will also be supported but not in the Spring release.
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