What they have done is launch a new web-based email service, called Outlook. Despite the name, it's nothing to do with Microsoft's email system of the same name, the use of which is ubiquotous in the corporate environment. If you have an existing Hotmail address you can use that, else you can sign up for a new email address at the website (www.outlook.com).
The initial feedback from 'techie' websites is mixed, but we find it quite good. The screens are clean and uncluttered, have little advertising and everything is quick and responsive (whether this remains the case when hundreds of millions of people are using it remains to be seen of course). The interface borrows from Metro, the interface used in Windows 8, so is quite stark but is used to good effect here. If you don't like it you can switch back to Hotmail, at least for now (longer term, Hotmail will be discontinued). But we rather think you might be...