For the astute Hotmail user, you may have noticed a header change where the top header bar is now slightly different:

This is subtle, but important. All the links are actually consolidated menus. Hover over any and you’ll see this:

And yes, SkyDrive (which now allows a 100MB maximum-per-file upload instead of the previous 50MB) is directly accessible from Hotmail or any other part of Live.
Another Wave 5 feature is a new selection in Options under the Reader email header called Conversations and faster reading:

It is here we see something so subtle you almost miss it:

Preloading messages to speed up reading is an HTML5 thing. This is bleeding-edge brand new stuff. What this does is make the browser act more like an app for Hotmail, bringing us ever closer to not needing a separate program just for email – at least for Hotmail.
"That’s the same as Google Gears!"
Nope. Wrong. There’s no additional software required to do what Hotmail does right now to cache emails on your computer for faster loading – assuming you’re using a modern browser. Gears always required extra software. Hotmail does not.
This may be the beginning of the end for Windows Live Mail
I’m talking about the mail client and not the email service.
There have been rumors flying around like crazy that Hotmail itself will be the replacement for the Windows Live Mail email client.
It’s already true you can pin Hotmail to the taskbar in Windows 7 and get right-click functionality just as if it were a locally installed program (drag Hotmail tab from IE9 to taskbar, choose to Pin there):

It’s also true you can poll mail from multiple accounts in Hotmail just like you would in the WLMail client. Most importantly, if Hotmail itself via HTML5 goodness can essentially do all the offline stuff WLMail can, well, you can see where that would lead. No more Windows Live Mail client; Hotmail only.
I want to make clear that Hotmail actually replacing the Windows Live Mail client is a rumor and not fact. However, given the increasing runs-just-like-an-app nature of the Hotmail site, the rumor does actually hold some weight.
If it is true that Hotmail will replace WLMail, it would happen in roughly 6 months to 1 year from now. The client would be retired, and WLMail 2011 would be the last free email client Microsoft ever released.

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