I'm having the exact same problem! I can't get any email to go out to hotmail domain. All other domains seem fine. It all started after applying the most recent updates on Monday.
So far I can't figure it out :(
Hey..I just got it fixed! Take a look at this article
http://support.microsoft.com/default.aspx?scid=kb%3Ben-us%3B322051
I had to call MS to get the hotfix..but it worked!
If you have IE6.0 with 128bit cypher on winnt 4.0 then most likely this is your problem.
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