I suggest that you reconfigure your account because it seems that there's a minor configuration issue on your end. Here are the steps on how to remove it:
1. On the "Tools" menu, click "E-mail Accounts."
2. Select "View or change existing e-mail accounts," and then click "Next."
3. On the "E-mail" tab, select the "Hotmail" account, and then click "Remove."
4. Click "Yes" to confirm that you want to remove the account.
5. Click "Finish."
Once removed, visit this link for the steps on how to add it back correctly:
http://windowslivehelp.com/solutions/settings/archive/2009/02/16/how-to-add-your-e-mail-account-to-microsoft-outlook.aspx