From Windows Live
With Microsoft® Office Outlook® Connector, you can use Outlook to receive your Windows Live™ Hotmail® messages—free of charge. Plus, use all the same formatting and organizational features you already use in Hotmail! With quick, easy access to your information on and offline, Outlook Connector helps you keep track of all your e-mail and contact information and automatically synchronize your Hotmail account.
Learn more here
UPDATE: Brandon Leblanc over at the Windows Experience Blog gives us a tutorial and some background information on the new Outlook Connector. Some interesting features include the Delta Sync technology which replaces WebDAV protocol formerly used for downloading Hotmail email in Outlook.
"The Microsoft Office Outlook Connector is designed to let you access your Windows Live Hotmail account through Outlook 2003 or Outlook 2007. You will be able to download and install the Connector to sync up your email and contacts in Windows Live Hotmail for free. However, if you are a paid subscriber of MSN Premium, Office Live Essentials, or Office Live Premium you will get the added functionality of being able to sync up your calendar, tasks and notes from Outlook to Windows Live Hotmail."
Read the rest here