So did you follow their instructions on how to set the language?
Regardless of what you think is happening, try setting the language to
see if it fixes the problem.  The wrong language, especially one for
which support has not been added to your web browser, may very well end
up looking cryptic or unintelligible.  You never did say that you
actually tried to set the language, signoff, exit the browser, purge the
browser's temp file cache and purge its cookies, and retry logging in.

Windows Live is a suite of services.  It cannot be encrypted.  So your
statement is bogus.  Instead, the Windows Live Hotmail *service* can be
configured in your account to use a specific language.  Use the webmail
interface to your Hotmail account, Options, Select language, and pick
English (or whatever you like).  When you log into Windows Live Hotmail,
the link to Options is on the right side in the toolbar next to the "?"
icon.  The 3rd section is "Customize your mail" (when displayed in
English) and the 2nd link under there is to select the language.  You
might be able to use Google's Translate (http://translate.google.com/)
to translate the Chinese web page into English so you know on what to
click.

Hopefully you've learned to use a STRONG password to prevent someone
from hacking into your account by guessing what is your password.  You
had better check all the registration information on your Windows Live
ID account, too.  Make sure your alternate e-mail address is correct,
and that you specify one (so you can use their "forgot password" process
to have a new password sent to your alternate e-mail address).  Besides
using a STRONG password this time, also make damn sure to change the
security question (used to reset a forgotten password).  Use something
different than what you specified before.