Kapil,

You sound like an individual willing to implement a WS-* specification! ;-)
I encourage you to start! See "Plumbwork Orange" for more details:

http://workspaces.gotdotnet.com/plumbwork

(Yuck, I feel so dirty; 50% shameless plug, 50% recruitment.) FWIW, I would
very much like to see an WS-Federation that utilizes WSE v2.0!

FWIW, numerous companies announced plans to implement the WS-Federation
specification, including SourceID:

http://www.sourceid.org/content.do?page=WS-Federation

You may of heard of SourceID; they provide a very good implementation of
SAML v1.1.

Others included:

OpenNetwork:
http://www.opennetwork.com/news/press/2004/2004-05-25_ws-federation.php
Oblix: http://www.oblix.com/news/releases/2004/052504.html

Note: There were a few other companies as part of this announcement as well.
These were the first I found using Google.

Cheers,

John