Since June 13, the Microsoft Office Outlook team has started a blog.  You can find it here.  Although there are not that many posts yet, it seems that they have released an Outlook add-in that allows you to access your Windows Live Hotmail account from within Outlook 2003 or 2007. 

The name : Microsoft Office Outlook Connector.  It's a free add-in and also most of the features like synchronizing your hotmail e-mail and contacts, you need the premium service (MSN Premium, Office Live Essentials or Office Live Premium) for synchronizing your calender, tasks and notes.

You can download the connector here.  After you have installed and configured the Connector you ahve to restart Outlook and then it's enabled in Outlook.  I've included a few screenshots.

After installing the conenctor you need to add your account information.

Next step is to restart Outlook.

After Outlook is restarted you will notice in your mailfolders that you have a new mailfolder with your Windows Live Account

You also have a new toolbar.  This toolbar gives you information about your account and the server status.

In your contacts, you will see a new group with the contacts of your Windows Live Account.