If your email account is on the blu-m.hotmail.com server, then you will be affected. Not sure if that's the only one, but my public email account which is on that server is down. I'm disconnected from that server, so I can't send/receive anything from that email. My main personal email however, is on the col-m.hotmail.com server, and it is running perfectly fine; I am still connected to their server on that account.
Therefore some of you may get lucky, some won't. I have 2 main email accounts using Outlook/Hotmail, and 1 is working, 1 is not. :)
That troublesome server seems to have been affected by around 5:00PM (GMT -7hrs) my time. By what I'm reading in this thread though, it seems the blu-m server was not the only one affected.