Hrm. Logged in just fine right now. So it appears from here that they aren't down or anything.
can you try a traceroute? if you are in windows, do "Start -> Run" and run "cmd.exe", in the text-box that pops up (a shell), type in "tracert www.hotmail.com"
If it says that it can't find tracert, I either mis-remembered the command name, or you need to find tracert.exe and change to that Folder in that text window "cd C:/winnt/system/" (or wherever it really is)
Let me know how far you got.
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