There are new reasons to use Microsoft’s Windows Live Hotmail for your e-mail.

Hotmail got a facelift a few months ago that made it speedy and attractive, but the interface will get some additional tweaks and performance will be improved in August. Small but welcome changes: you’ll be able to set up an out-of-office or vacation message; you can forward incoming mail to other e-mail addresses; and you can go straight to your Inbox without a stop at the “Today” page. Here’s a blog post about the upcoming improvements.

All of us are struggling with oversize mailboxes. Hotmail will be increasing the maximum mailbox sizes to 5Gb for free accounts, 10Gb for paid accounts.

The software to connect Hotmail to Outlook is out of beta and officially released. The Hotmail account appears in Outlook separately from any other personal folders or Exchange mailbox, and is kept in sync with Hotmail continuously. If you have a Hotmail account and Outlook 2003 or 2007, you can download the final release of the Outlook Connector here.

The Outlook connector is free, but only mail and contacts are synced for a free Hotmail account. A paid Hotmail subscriber can also sync calendar, tasks and notes.

The interesting thing is that Hotmail is not limited to e-mail addresses named “” It’s easy to set up Hotmail to handle all the mail for another domain name. For example, I could set up Hotmail to process mail addressed to all “” addresses, using Microsoft’s free “Windows Live Custom Domains” service.

When this is set up, you can use Outlook to display your mailbox on your desktop computer (or multiple computers, if you like), and you can access the same mailbox online from any computer, using Hotmail’s slick interface.

There’s a downside for Outlook power users. Hotmail accounts can have multiple folders for messages, but none of them can be sub-folders. Many people have elaborate nested folders in their Outlook mailboxes; a Hotmail account would have to be organized differently.

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