Sometimes the Recycle Bin icon (Windows 7) will show the "empty" icon instead of the "full" icon even though the Recycle Bin is not empty and has files in it. When this happens, the Recycle Bin icon is not refreshing properly. When you said that there was nothing there, I just needed to know exactly what you meant by that. Nothing there as in empty Recycle Bin icon, or nothing there as in no files in opened Recycle Bin. That's all.
I noticed you have another post about the Recycle Bin here:
Recycle bin
Is the issue here with the Windows 7 Recycle Bin on your desktop, or the one in WLM Hotmail?