I think I finally found a way to sync Internet Explorer favorites using SkyDrive. As you probably know, you can only sync one local folder (normally C:\Users\<user name>\SkyDrive). But using symbolic links, you can in fact “cheat” to make Internet Explorer use the SkyDrive folder.
First, I created a folder named Favorites in SkyDrive. Then, I started an elevated command prompt (“run as administrator”) and ran this command on each computer:
cd C:\Users\<user name>
ren Favorites Favorites.bak
mklink /d Favorites C:\Users\<user name>\SkyDrive\Favorites
Edit: There is a much simpler method. Select the Favorites folder in file Explorer, then select properties, then go to the location tab, then type C:\Users\<user name>\SkyDrive\Favorites as the new location and click the Move button.