SCAM! SCAM! SCAM!

Change your password immediately, but its probably too late...
Its MUCH worse for you than the app not working properly, or even taking $1 for ad-free option:
This is NOTHING to do with Microsoft; it purports to be the Hotmail app and is top of the Apple list for Hotmail iPhone apps. You will configure the email account, including your password, but will not download messages. THEY ALREADY HAVE YOUR PASSWORD! I hope you dont have any sensitive information lying in your inbox.
Please, Apple: remove this from the Appstore.

camshaft’14 about Windows Live Hotmail