Microsoft is reinventing Hotmail and rebranding it too. They have a working preview of the new Outlook.com service which will eventually replace Hotmail.
You don't have to do anything right now. You could log into Outlook.com with your Hotmail credentials and access your email through the new interface. You can also take the opportunity to claim your own new Outlook.com address while the getting is good.
When you do so, you'll be given the opportunity to force Hotmail email into its own separate folder, but only if you want to. Once you create the new Outlook.com email address, you'll no longer be able to log into Hotmail, you'll have to use your new address. But any mail coming to your original Hotmail email address will still be forwarded to you. So think of this as an opportunity to weed out who has your address and switch to something new while keeping a connection to the old.
If like me, you are accessing your Hotmail via another email service or email client, you'll have to update everything. I use GMail to access all of my email coming to every email address I own, so I had to add the POP account to GMail to get all my new Outlook.com (and the old Hotmail) email automatically forwarded to GMail. Then I deleted the mention of Hotmail from GMail.
All I have to do now is let anyone who sends email to Hotmail know that my address has changed. But only if I want them to know. I expect that at some point in the future, you'll be able to tell Microsoft that you want to abandon the old Hotmail address completely.
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