@morbiuswilters said:
Saving your passwords on your own machine is not a security-compromising WTF. Also, I think you have to have an alternate email address to sign up for Hotmail, but even if you don't how else are they going to handle a password reset? They have to have an email to send the reset confirmation to, it's either got to be your alternate email account or the one you are trying to reset. This is a pretty reasonable way for handling lost passwords.
I don't know if they still do this, but like many sites Hotmail used to have the option to create a new password for your account by answering a security question. One of these was 'What is your favourite football team?', and I could not believe how many people selected this one, as practically anybody who knew them could change their password. Out of curiosity, and nothing more than that of course, I once tried logging in as 'liverpooolfc@...', and was amazed to find that this person had chosen the football security question. Too bad I couldn't work out the answer, though.