Ok i know how confusing the branding was, and ya Windows Live Mail is not hotmail :) it is a desktop application to access any kind of email either POP3, IMAP or HTTP like hotmail etc... So why use it, and what is office live and custom domains where do they all fit into the picture.
Let me then tell ya the scenarios around Windows Live Mail and how I was so happy to use the 3 services in conjunction together. So i have 4 or 5 other email accounts with a mix of pop3 and http and of course i never check them that often so i wanted an application beside outlook 2007 that is much more lightweight to check all those emails in one place. Here Windows Live Mail comes into the picture ;) basically it is the next version of outlook express, it has RSS integration which is awesome, news groups using NNTP and most of all it can support any number of accounts in one client. Further it is so light weight takes around mili seconds to start up, outlook 2007 takes almost 5 minutes on 2 gig machine :) Finally, it integrates so well with messenger, office live and custom domains.
So lets speak a little bit about what you can do with Custom Domains. Well lets say you create your own domain and you want a secure email service along with it, something that can provide you with a 2 gig storage and a superb anti-spam filter, outlook like interface then you should go for custom domains with hotmail :). So you configure custom domains and you point your DNS MX Record to hotmail and voilà you got an email account with your domain but using hotmail service. I am using it now and it is amazing, now i can access my custom domain email just from any where and all spam and phishing is handled by hotmail
By the way i also use gmail and i am comparing the spam filters and i get the same spam content in both but hotmail completely blocks it while gmail is still showing it in my inbox.
Anyway now what about Office Live. So lets say you have your own company and you have 5 - 25 employees or more but it is a small business and you want a website, business applications, calendar, contacts and most important you want EMAIL. so you sign up with office live YES free of charge and you get 25 accounts 2 GB storage for each email with hotmail services :)
Now get your office live account, custom domain account, hotmail and use them with Windows Live Mail you get a full desktop email application with all hotmail services but in an offline capable application. Isn't that amazing :)
And if you wonder if you can receive and "send" yes it works i tried it yesterday and it is amazing now i can access all my emails in one place and use my hotmail and custom domain account to send and receive through Windows Live Mail. Even better i have Windows Live Mail in 3 different desktops and i don't have to worry about storage cause hotmail is an online service handling all the storage for me :) and what everything is online for me :)
Now a bunch of things i would love ot see in the future of Windows Live Mail, is integration with windows live photo gallery, and windows live folders. It would be my all in one application just from there i can access my photos and folders that are all in sync with a reliable online service.