Another service, Windows Live Messenger presence, is also built into the product, enabling customers to see if their Messenger contacts are online right from their in-box. If they are, a conversation can be initiated directly with that contact.

While the free service is powered by advertisements, Microsoft listened to tester feedback during the beta process and removed the skyscraper ad that ran down the right of the screen, Richard Sim, senior product manager for Windows Live Hotmail, told eWEEK.

"Some testers complained strongly about the effect that ad had on screen real estate and told us it felt like they were looking at their mailbox through a keyhole," Sim said. "So, in spite of the financial repercussions to us of removing that ad, we did so, and users will now see just one ad across the top of the page, he said, noting that the ad-free paid service will also continue to be available.

E-mail security remains a key concern for customers, so Windows Live Hotmail has been designed to prevent potentially harmful e-mail messages from making it into customer in-boxes, while also allowing users to make more informed decisions about the safety level of their e-mail, Doerr said.

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"Some of the fundamental things we have done include introducing the safety bar in mail, which has had a great response from customers," he said. "While we try to block as much as possible at the entry point, some gray stuff will find its way into the box, so giving customers as much information and as many options as possible is key to dealing with that."

While all incoming messages will be subject to multiple safety checks, when they arrive in the Windows Live Hotmail in-box, the safety bar at the top of each e-mail message will give a visual cue of the status of the e-mail: white indicating that the e-mail is from a known sender, yellow that the e-mail is from an unknown sender and red that the e-mail is potentially fraudulent, Doerr said.

Hotmail users will also be able to automatically delete junk e-mail messages with just one click on the "mark as unsafe" link, block any future e-mail messages from that junk e-mail sender and report the junk e-mail sender to Microsoft's spam filters to help protect others.

Customers will be able to access their e-mail on Web-enabled mobile phones or PDAs, and, going forward, Windows Mobile customers will receive a richer online and offline Windows Live Hotmail experience with Windows Live for Windows Mobile, which will ship with Windows Mobile Version 6.

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Microsoft is hoping that the look and feel of the new Hotmail and the security and feature enhancements it brings will be compelling enough to persuade most of its 280 million customers to upgrade to the new service.

The company has tried to make that experience as easy and seamless as possible. All users have to do is log into their existing account and click the green "Join Windows Live Hotmail" button. New users can sign up for a Windows Live Hotmail account here.

While the plan is not to force existing MSN Hotmail customers to upgrade right away, Sim admitted that customers eventually will have to upgrade.

"At some point it just will not make any sense to keep MSN Hotmail going. At that time there will then be an auto upgrade of those remaining MSN Hotmail users," he said.

This article was originally published on eWeek.com.

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