Probably one of the most simple ways for someone to access your hotmail acount would be if your running MSN Messenger. All the "hacker" needs to do is click on the link reading "no new e-mail" or whatevr and this gives them direct access to your inbox.
Another way it can be done is called adding. This means that if you log into another Messenger program e.g. Trillian, the program will need to store your passwrod as a way of easy acess to the link to your inbox. By this i mean that (too put it quite simply) the link will (in the bakground) go to the hotmail site and using your user name and password stored in the program, it can send it to the hotmail, looking like your actually signing in. The password can then be seen when you click on the window the program has opened, it will have a value string of:
[something]=pass?PASSWORD
This isnt meant to be used as a "hack", its used so that you can sign in without all the hassle but other messenger programs dont have the facility encrypt the information you need to sign in when sending it to the hotmail site.
Sorry for any complication!!