I use Thunderbird with no problems.
But I never tried to migrate anything from Hotmail.
Re Windows Live: I cannot recall exactly why it disgusted me, but I also was not particularly excited about the whole "Windows Live" concept and all that it entails. All kinds of supposed functionality, doodads, services, and downloads that didn't interest me at all. All I wanted was a simple stand-alone email app that worked.
Mozilla has a pretty good Thunderbird forum that could probably answer your questions about Hotmail. http://forums.mozillazine.org/index.php
Migrating email is usually hell, regardless of app.