IntelliAdmin reports that users who use Outlook to manage their Hotmail accounts report problems after installing Internet Explorer 7. Outlook keeps asking for the password for hotmail - even when it is correct.
After searching the newsgroups and message boards I found out that this update can be installed via automatic update. You need to run automatic update, then pick the Software, Optional Updates setting on the left. Sure enough you will see it on the list.
This is described in KB article 904942
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