Update: We have a workaround in place so mail will be flowing properly to Hotmail going forward. –Simon
The outbound mail service for “legacy” retail users (those using the old interface and system) is currently being blocked by Hotmail.
If you’re trying to e-mail someone at Hotmail you’ve probably noticed it.
We’re taking a multi-pronged approach to this problem so it will be cleared up shortly. When the fix is in place I will notify everyone via blog (and of course if you call in Support will know too!)
Thanks for your patience.