If you’re looking to setup Outlook (2003 or 2007) to connect to Hotmail or your Windows Live account, you’re in luck.  Microsoft has released the connector below just for that purpose

• Microsoft Office Outlook Connector - available from the Microsoft download site

Once installed, the connector will allow you to send and receive email in your Hotmail / Windows Live account from within Outlook.  The connector also allows you to manage your Live contacts, but doesn’t let you sync up your calendar (the new beta version of the connector can sync your calendar).  If you’ve got Hotmail Plus, which is a paid subscription services, you’ll also be able to manage your calendar as well as your tasks and notes.

Steps to setup:

1. Download the OutlookConnector.exe file from Microsoft
2. Make certain that Microsoft Outlook is closed
3. Run the OutlookConnector.exe file
4. Accept the license agreement and click Continue
5. Click Next at the Microsoft Office Outlook Connector - Setup Wizard screen
6. Input your user name / organization name, then click Next
7. Click Install to begin the installation
8. Once complete, click Finish.  Microsoft Outlook will now open.

Once Outlook opens, you will be presented with the following screen requesting your Hotmail / Live logon information.

Once you’ve setup your account information, Outlook will need to be closed and reopened.  After you re-enter Outlook, you’ll be prompted with the screen above.  Input the appropriate info and click OK.

As you can see below, your Hotmail account will now be listed under Mail Folders.

You will also notice that a new menu item is listed in your toolbar named Outlook Connector.  Click on this item will provide access to other settings, most of which are configured within your Hotmail account online.  There is one notable setting related to how email is downloaded.  Under Outlook Connector, select Download Mode to set how you would like email retrieved from your Hotmail account.