You have a third option.
Use WLM for http and continue using OE for pop and imap.
WLM can run at the same time as OE.
When you install WLM, the OE shortcuts may be removed.
WLM will also want to be the default email program.
WLM will import all of the accounts in OE.  Just remove the accounts from
WLM.

Both OE and WLM support POP3 and SMTP.  So the change from WebDAV to
DeltaSync is irrelevant to those accounts.  You can use either OE or
WLM.

I haven't heard what Microsoft will do regarding grandfathered accounts
(whether they were grandfathered back in Feb 2000 for MSN or back in Nov
2004 for Hotmail).  Don't expect Microsoft to keep carrying them along.

This is the account that could be affected by the switch from WebDAV to
DeltaSync and you'll either have to use Outlook with the Outlook
Connector add-on (only works with Outlook 2003/2007) or WLM.  Well, a
3rd choice is to dump the old Hotmail account and find a freebie POP3
account somewhere else.  Okay, there is a 4th choice: convert your old
MSN Hotmail account to a new Windows Live Hotmail account (if you
weren't already forced over) and get a Plus account which gives you
access to their POP3 mail host (this was returned around last Nov 2007).

Since neither WebDAV or Deltasync have anything to do with NNTP (both
support NNTP), it's up to you as to whether you use OE or WLM.  This
point has no bearing on which of Microsoft's free e-mail clients that
you use; that is, newsgroups support is superfluous to your decision.

WLM has the familiar File -> Import navigation of OE.  It shows as
supporting the import of .wab files.  I have tried it yet.  I've spent
most of my time redoing my rules because what worked in OE may not
necessary work as expected in WLM.  For example, in OE the POP3 accounts
got aggregated into one message store and you used rules to slice out
the e-mails to different folders.  In WLM, each account has its own
message store and there is a general storage area.  You might have to
rethink your rules in WLM.  To keep messages within an account, for
example, you'll have to add the clause to test through which account an
e-mail was received and then pick a folder under that account's message
store rather than have the rule move it under the general storage area
(unless you want it that way).  About two-thirds of my rules had to be
modified in WLM and got multiple by the N accounts that I have.  They
might've worked okay as-is but not how I would've expected for behavior
under OE.

Which only affect your point b above.

That's a choice and one that I kept considering while trialing WLM (in a
virtual machine so I could get rid of it very easy without impacting my
current working setup).  Or see the other choices that I noted under
your point b.

You could start trialing WLM now so you are already prepared to have
WebDAV yanked away from your grandfathered account *if* it happens for
grandfathered accounts.  I'm leaning that grandfathered accounts are
going to get killed in or soon after June.  One Microsoft blog noted
that when POP3 was returned (only for Windows Live Hotmail PLUS
accounts) in November that there was consideration of bring back POP3 in
about another 12 months for freebie accounts.  

Not everyone is keeping their e-mails online to qualify Microsoft's
claim about DeltaSync being better for the huge mailboxes (because a
huge capacity doesn't equate to a huge consumption).  At most, in any
mail poll, my e-mail client sees maybe all of half a dozen, or less,
e-mails waiting and I want them to be local instead of up on the mail
host, so I will never be consuming gobs of disk space up on the mail
host.  I'd have to poll my mail account about once after abandoning
after 3 years to maybe have a gigabyte of disk space consumed.  Repeated
polling of my account means there won't be much on the mail host and
usually there won't be anything there - but then I don't go leaving
e-mails sitting for months or years in my Inbox and instead delete them
or move them into other holding folders (but which are in my local
message store, not up on the mail host).  

That there is even 6.6GB of storage in my Live Hotmail account is
ridiculous.  The gigabyte wars between Hotmail, Yahoo, and Gmail were a
joke to me because I never consumed more than maybe 100MB at any time -
but maybe I manage my e-mails better or differently.  I've seen plenty
of boobs desparately begging how to restore their old many year-old
e-mails that they stupidly left in their Inbox.  Flat-filing your entire
e-mail storage in one folder just sounds stupid and also very lazy.  I
have one family member that has many thousands of e-mails sitting in
their Inbox dating back years ago.  Because of her laziness over all
that time, she hasn't a clue what's in there anymore to know if she
wants it anymore, and because she is lazy means she isn't going to clean
it up, either (her house is a pig sty, too).

Well, you know how to visit newsgroups.  So now go over to the one for
WLM at microsoft.public.windows.live.desktop to do some lurking while
reading the posts.  There are definite defects with WLM but some appear
to be in how users have to rethink how the message stores are managed
under WLM which is different than for OE, some will have to modify their
old rules, some complain about losing the [clumsy] identities feature
available in OE but not in WLM, and so on.  Of course, trialing WLM
would let you better figure out whether YOU want to use it or not.  Just
because you install it doesn't make OE explode and disappear (although,
as mentioned, WLM's install will fark over the OE shortcuts *if* you
left them in their default Start menu paths rather than organize your
Start menu how you want - yep, I've seen users that flat-file their
shortcuts so they see a many hundred item Start -> Programs folder as if
that is really convenient to scroll through).

In OE, you can continue to receive messages in your Hotmail inbox (only)
after 30 June 2008 if you (1) subscribe to Windows Live Hotmail Plus
(http://get.live.com/mail/options) *and then* (2) reconfigure the Hotmail
account for POP3 access
(http://groups.google.com/group/microsoft.public.outlookexpress.general/msg/1dd1c
1da2d68ea43).

Windows Live Mail includes just about all of the functionality (at least)
currently available in Outlook Express (access to POP3, IMAP, Hotmail, and
newsgroups).

Windows Live Mail overview
http://get.live.com/wlmail/overview

Windows Live Mail newsgroup
news://msnews.microsoft.com/microsoft.public.windows.live.mail.desktop

Yes, although installing Windows Live Mail will remove your shortcuts to OE
in Start menu and Quick Launch bar and will assert itself as the default for
Email in Set Program Access and Defaults.

See this recent, ongoing conversation about all of this:
http://groups.google.com/group/microsoft.public.outlookexpress.general/browse_fr
m/thread/54b191d2ef1c9614

Windows Live Mail (WLM) is based on Outlook Express and pretty much the
same program and has similar features including a number of the same
quirks.

One of the biggest differences is under the covers.  WLM dumps the
fragile DBX files for the message store and uses EML files (one per
message).

If you are using Identities, that's one thing you'll lose.  If you are
using them for multiple users on a PC, then WLM expects you to use
Windows User Logons instead.  If you are using them to separate POP3
accounts, WLM does a better job of that directly.  But if you are truly
using identities, such as to separate personal verses business accounts,
that will be a problem.

There are some cosmetic differences in the look and feel.  But once you
look at the menu options, you'll find much that is a direct copy,
although some options have been moved around.

As to your specific questions:

1) WLM uses its own address book.  It will import the OE WAB file.  It
supports groups but not folders.  Members of a group must be in the main
contacts, whereas OE allows you to put e-mail addresses in a group
without putting them in the main contacts.

2) WLM has its own spell checker and is not dependent on Word/Office.
The upside is that you avoid the OE/Office 2007 fiasco.  The down side
is a limited number of languages (English, Spanish, French, German,
Korean).

3) On install WLM will import the OE data and make itself the default
mail program.  OE is still installed with all its data.  It's pretty
easy to switch back.

To set Outlook Express back as the default mail program:
Start, Run and enter:

 "C:\Program Files\Outlook Express\msimn.exe"   /reg

To recreate missing shortcuts to start OE, create a shortcut with the
target:

 "C:\Program Files\Outlook Express\msimn.exe"