I see a couple problems here. First connection security should be "none". 
Another potential problem is probably that you have both the receive and 
transmit ports set to the same port number. Also check Hotmail web-mail site 
settings, it needs to be set to use HTTPS automatically. The Hotmail 
web-mail extension uses this as a default setting. This settings is in the 
options section on the Hotmail site at the bottom of the page.

One thing to note here is that the security setting of none is only used 
when Web-mail extension communicates with TB and not with the actually 
Web-mail site in question those dicussions are made upon the normal 
requirements of the site. 

Although setting both recv and send to same port may not cause a problem but 
it is not recommended as the problem may be trying to both pop3 and smtp 
mode at the same time causing a conflict especially since multitasking is a 
normal way Windows does things nowadays. The normal Localhost port setting 
for receive is 110, Connection Security None and Password transmitted 
insecurely. 

Eugene

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