A space-based Michelson laser interferometer for detecting gravitational waves sees a different universe than is seen by the Earth-bases instruments, just as the appearance of the optical universe is different from the x-ray universe. Because of the absence of earthquake, a space-based instrument would be most sensitive to gravitational waves with frequencies between 10-4 Hz and 10-1Hz. Among the sources that could create gravitational waves at these low frequencies are close compact binaries, such as binary neutron stars and binary black holes, and events around massive black holes.
The only space-based gravitational wave detector that is currently planned is the Laser Interferometer Space Antenna (LISA), a joint project between NASA and ESA. LISA is a set of three spacecraft that fly in an equilateral triangle formation around the Sun. They are far from Earth, trailing Earth in its orbit by 20° as measured at the Sun. The separation between pairs of spacecraft will be about 5 million kilometers. The large separations permit the detector to achieve high sensitivity without resorting to a folded light path.
The configuration of LISA is very simple. Inside each spacecraft, floating free, is a reference mass. The main craft in the formation shines a laser on the reference masses in each of the other two spacecraft. In response, those spacecraft shine their own lasers back to the main craft, adjusting their own lasers to be in phase with the laser at the main craft. The main craft then compares the light receives from the other craft with the laser light that it is producing to determine through the interference pattern the change in separation between the craft. The two secondary craft shine their lasers at each other to determine their own separation, giving a measurement of the change in distance along the third side of the triangle.
The mission actually has two parts. In the first part of the mission, LISA Pathfinder will test the concept of space interferometry. This mission is expected to launch in 2008. The actual mission to detect gravitational waves, LISA proper, is currently planned for 2012 or 2013. The mission is expected to last at least five years.
So far the author has found no budget numbers for the ESA half of the funding on the internet. According to the President's budget submission for fiscal year 2005, spending on LISA by NASA was $25.1 million in 2004, and is proposed to be $19.0 million in 2005.