I had a similar problem in Outlook 2007.
Download latest freepops.
http://downloads.sourceforge.net/project/freepops/freepops/0.2.9/FreePOPs-0.2.9-openssl.exe?use_mirror=kent
Download it and install it.
Update "hotmail.lua" in
"C:\Program Files\FreePOPs\LUA\"
with
http://www.freepops.org/download.php?module=hotmail.lua
Download it and copy it to folder.
Set the following in your email account settings.
Incoming mail server: 127.0.0.1
SMTP: mail.btinternet.com (or your isps SMTP) (may need SMTP authentication)
User Name: xxxx@hotmail.com
In the advanced tab set
Incoming server (POP3) port to 2000
Windows firewall and your router may need port 2000 opening for your computer.
This worked for me in Vista 64 with Avast! and I didn't need to do anything with the firewalls.
I re-edited this to try and make it clearer, especially the links. Sorry Yahoo! This is a rubbish editor.