This is what Ellie Powers-Boyle, program manager has to say :
Performance: We’ve been hearing you loud and clear across the world: speed is one of the most important aspects of a web-based email service. We’ve spent more time in this release identifying what parts of the product are slowest and fixing those. We hope that you notice an improvement when this update is released to your account, and we’ll continue our work on performance in future releases.
Quality of Service: Our last release went quite smoothly, and we’ve been continuing to monitor the live site to make sure that we’re providing e-mail that is reliable – you always want to be able to get to your mail, and we hear you!
More storage! Just when you were wondering how you’d ever fill up 2 or 4 GB of mail, we’ve given you more storage. Free users will get 5 GB and paid users will get 10 GB of Hotmail storage.
Mail retention changes: We’ll be increasing the amount of time that we leave messages in your junk and deleted items folders over the next few months.
Contacts de-duplication: Do you have five different entries for the same person in your Contacts? Yeah, me too, but not anymore. We’re the first webmail service to roll out “contacts de-duplication”. If you get a message from “Steve Kafka” and click “add contact” but there’s already a Steve Kafka, we’ll let you know and let you add Steve’s other e-mail address to your existing “Steve Kafka” contact entry. We’re just trying to be smarter to make your life easier and faster. There’s also a wizard you can run to clean up your existing duplicate contacts.
Show content more easily: Hotmail blocks images and links in messages from unknown senders for your protection from spammers and phishing scams. Now you can click directly on the gray square or link to decide if you want to show content in a message. (It’s still not a good idea to show content, especially images, in messages from spammers. Just loading the images in a spam lets them know that you’re reading their e-mails.)
Spam-fighting: We’ve made it possible to report phishing attacks like those fake bank notices or fraudsters who want your checking account number so they can supposedly make a deposit. Just click “report phishing” if you think you’ve found a dangerous scam. In the junk folder, click “not junk” to help train our filters. Every mail you report does help make our spam filter smarter, but fighting spam takes constant vigilance. Spammers always find a new trick whenever we thwart their old tricks.
Right-to-left languages: Support for Hebrew and Arabic is now out of beta! If you speak these languages or want to see Hotmail in a totally new way, go to Options and change your language. We fixed a lot of bugs for users of Hebrew and Arabic, so we hope the whole UI works better for you now.
More space for your email, a.k.a. smaller header: We heard you asking for more space for your mail, so we shrunk the header in this update.
Forwarding messages: You can now forward mail from your Hotmail account to other accounts. For now, if you have a free account, you can only forward your mail to other Hotmail accounts. (Paid accounts get more choices.) This is great idea if you have a few different addresses and want to consolidate your mail.
Cobranding: This is what we call showing the logo of an organization for whom we are hosting email. Hotmail is currently hosting e-mail for universities (and a few ISPs) around the world, so we show their logos in Hotmail.
Accepting meeting requests: If you receive a meeting request, such as one sent from Outlook, you can now click “accept” and have it added to your Calendar. This had existed for years in MSN Hotmail, and we’re adding it to Windows Live Hotmail now.
Vacation replies: Now Hotmail can automatically tell your friends why you haven’t written them back in a few weeks.
Classic version jump to page: In the classic version, we’ve made it easier to jump to different pages of mail. This will be very handy as you grow into your new 5 GB or 10 GB account.
You can turn off the Today page (if you want to). If you’d rather see your inbox immediately upon login, you have the option to turn off the page of MSN news (called the Today page).Great additions !