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There is an answer, but unfortunately the answer won't make everyone happy.
In the past, users of Outlook Express were able to download email from their MSN Hotmail accounts directly into OE. Unfortunately, Microsoft began phasing this out some years ago without providing a suitable replacement. Essentially, MSN Hotmail users were left out in the cold - the official line was that they had to use the web interface and only the web interface.
In recent months things appear to have changed.
Windows Live Mail, which is a free downloadable desktop email program that effectively replaces Outlook Express, officially supports Windows Live Hotmail accounts. In other words you can configure Windows Live Mail to download your Windows Live Hotmail mail.
Microsoft Office Outlook Connector is a free downloadable add-in for Microsoft Outlook 2003 or 2007 that adds support for downloading your Windows Live Hotmail directly into Outlook.
This is great news for users of those email programs, or those willing to switch to those email programs. Among other things, it means that there's now an official way to download and backup your Windows Live Hotmail.
However if you use another email program things are still not so rosy.
If, like me, you use Thunderbird, there is theWebMail extension. Using this extension you can download not only Windows Live Hotmail, but also several other web-based email accounts into Thunderbird. The downside is that it's naturally not supported by Microsoft. And of course it requires that you run Thunderbird. All that being said, it's a fine solution for Thunderbird users.
I'm not aware of solutions for other mailers.
Specifically, where this comes up short for many people, is that I'm not aware of a solution for mobile devices such as Blackberry or Palm PDA and phones. Those require standard POP3/SMTP email settings, which Windows Live Hotmail does not supply. Naturally you can view your Hotmail in a web browser, but on portable devices that's often very difficult to manage.
However, there is a workaround.
Windows Live Hotmail will now allow you to forward your email to another address. So, to receive your email using a mailer that requires a POP3/SMTP connection, you can:
That's all there is too it. Now you can access all the email sent to your Windows Live Hotmail account on whatever device you prefer. If your device supports the configuration, you can even change it to set your return address to be "From:" your Hotmail address, even though you might be sending through GMail.