Niggs, have you spoken to microsoft? seems odd that the problem lies with the hotmail software, not your actual PC.
It may be a virus of some kind that has logged your keystrokes for the password etc. It may then send those details back to other PC's so they can send the emails while yours is off.
I'd recommend a really good clean of your PC, and forget the big name virus software like mcafee etc, they really aren't worth diddly. I had mcafee before and it couldn't clean a plate with a whole bottle of fairy!
try AVG, ad-aware and others
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