Try this and good Luck
First you have to have a paid Hotmail Plus account:
Account Information:
Name: John Smith (note: enter your own name)
Address:
example@hotmail.com (note: enter your full Hotmail email address)
Description: Hotmail
Incoming Mail Server:
Host Name: pop3.live.com
User Name:
example@hotmail.com (note: enter your full Hotmail email address)
Password: password (note: enter your Hotmail password)
Outgoing Mail Server (SMTP):
Host Name: smtp.live.com
User Name:
example@hotmail.com (note: enter your full Hotmail email address)
Password: password (note: enter your Hotmail password)
Advanced Settings:
Incoming Uses SSL: On
Outgoing Uses SSL: On
Authentication: Password
Delete from Server: When removed from Inbox (or your preferred option)
Then if folders do not show:
Go to your hotmail page. Click on Windows Live(upper left).
Click on windows live home page.
On upper right hand side you should be able to click on windows live for mobile.
Click on windows live hotmail(get you mail on the go).
You should be able to go from there. Once you set up you will receive a text message with a link on your iphone. Once I clicked on the link I was able to save it to my home page on my phone.
If that fails, then my recommendation would be to use izymail.com (this is what I use now) or open a free Gmail account which I have also done and am in the process of converting all of my msn to Gmail.
Good Luck