ESRI and Bing Maps (formerly Microsoft Virtual Earth) have developed a seamlessly integrated solution to view Bing’s aerial, road, or hybrid data as a base map in ArcGIS applications.  These layers are the same that can be viewed via Bing Maps web interface offering a huge variety of imagery throughout the world including very high resolution sources.

The layers are integrated into ArcMap by adding these .lyr files (right-click to "save as").

Microsoft_Virtual_Earth__Aerial.lyr (13 KB)
Microsoft_Virtual_Earth__Aerial_with_labels.lyr (13 KB)
Microsoft_Virtual_Earth__Roads.lyr (13 KB)

These small .lyr files may be saved on your hard drive and added to an ArcMAp project just like any other layers that you have stored locally. In order to use these layers, however, you will need to have the latest version of ArcMap (9.3.1) installed, and a new license must be installed as described on ESRI's site. 

For those of you connecting through UC Berkeley’s license server, this license update has already been made, and the layer should open when added to a project