According to a Official blog post of Outlook team, Microsoft has upgraded the security of Outlook Hotmail Connector, a move which is a follow-up of adding an all–HTTPS option in November 2010.
The new Outlook Hotmail Connector encrypts traffic between email client and Windows live Hotmail service.
According to Outlook team when we are connected via HTTPS we should be confident enough that our account is safe from Hijackers. The new Outlook Hotmail Connector encrypts email, calendar and contact services between Outlook and Windows live.
Gmail users were having option of encrypting Gmail traffic from 2008, but in January 2008 when Chinese Hackers tried to access Gmail accounts of human rights activists of that country, Gmail enabled HTTPS to default.
Outlook Hotmail Connector is available for download at Microsoft website in 32-bit (or by clicking on 32 bit link) and 64-bit (or by clicking on 64 bit link) version for Outlook 2003, 2007 and 2010 but Outlook Hotmail Connector is not available for Outlook 2011.
You can also download Windows Live essential update which also include HTTPS enabled Windows Live Mail from Microsoft website or by clicking on this link.
