what is the state of the "C# compiler as a service "

It's already available in Mono for quite some time.

It has been released CTP version in the name of Roslyn. You can check it at RosLyn

Certainly not C# 4.0. We are just finishing up the last few bug fixes for C# 4.0.

This direction for the toolset is the long term plan, and might never come to fruition. And I don't discuss schedules for unannounced, hypothetical future features.

UPDATE: October 2011

We have just shipped a preview release of "compiler as a service" aka the "Roslyn" project.

We are still not announcing the final ship vehicle; it will be post Visual Studio 11.