If you see a similar response to the telnet as I have above, you should be able to connect to hotmail just fine. Since 11 of their 14 hosts aren't responding, and all of the MX levels are the same (5), there may be an issue there. I know that you get a round-robin effect with the hosts, but I don't remember if it's single-attempt round robin (ie: try mx11, ok it failed, wait a little bit, then try mx11 again), if it's a single-attempt with lookups in between (ie: try mx11, ok it failed, wait a little bit, do a lookup and try the returned host round-robin again (so you may or may not get the same host again)), or if it's a multiple-attempt round robin (ie: try mx11, ok it failed, try mx12, ok it failed, continue until one succeeds.)
I believe that's left up to the implementation of the MTA. I'm using Courier, which tends to be more strict on following RFCs, and in the case of an MX record w/ a IP address (not compliant with an RFC) bails rather than look to the next, even if it is at the same MX priority. -mike