Don't think they ever gave a full explination. If you had an account before Feb 2005 (I think) you could still use it but it was for new acconts they stopped Outlook support.
If you still want to use a local e-mail client with Hotmail try Thunderbird it's free
cool, it works great. But on the hotmail i've got a folder where i store all my old messages, is there a way that i can access that folder, because at the moment all i can do is recieve new messages and send new ones.