The following reply from MSN support was posted for info:

Dear Hotmail Member:

I understand how important it is for you to have this issue addressed
immediately and I sincerely apologize for the delay in getting back to you.

As of September 27 2004, the protocol that allows Hotmail Customers to
access their MSN Hotmail account from within Outlook, Outlook Express, or
Entourage (WebDAV) is no longer available to any new users with free Hotmail
accounts. Free users who are already accessing their mail through Outlook
and OE will continue to be able to do so until late in the first quarter of
2005, after which time the protocol will only be available as part of MSN
email subscription services. It is possible that during the time we were
making these changes you may have had problems accessing your email via
Outlook or Outlook Express WebDAV as part of the transition process.

Thank you for your patience.

Sincerely,

Wilma T.
MSN Hotmail Technical Support