Instant Messaging with your MSN Messenger contacts is possible from within Hotmail.

Since the launch of Hotmail Wave 10 on November 18th 2004, when you log into your Hotmail account on Internet Explorer, you see a pulldown menu with your current Messenger status and the options to send an instant message or invite your Hotmail contacts for realtime conversations. Also, "your Hotmail address book works seamlessly with MSN Messenger contact lists. So it's easy to manage one centralized list that is shared between both Messenger and Hotmail."

But MSN Messenger is going to be integrated even more in MSN's popular Hotmail service. December 5th, 2004, I was favored a sneak peek into Microsoft's extra plans with this freshly added menu! In the near future*, when you fire up your browser and sign into Hotmail just to check your e-mails, you'll be automatically logged into MSN Web Messenger, Microsoft's entirely web-based Messenger client (screenshot #1). Consequentially, people are notified with a toast telling them you've logged into MSN Web Messenger, thus they will be able to send you an instant message. If you receive such a message, you'll hear the familiar sound alert and the pulldown menu will show the highlighted "New Message" text (screenshot #2). If you open the message -by clicking on the sender's nickname- a web-based conversation window will pop up and you'll be able to reply and continue the conversation from there. Also, new e-mails are accompanied with a sound too because you're actually signed into Web Messenger in the background. Hence Hotmail pages operate as a substitute for MSN Web Messenger.

This new feature: "If I'm not already signed into MSN Messenger, automatically sign me in to Web Messenger when I sign in to Hotmail" (screenshot #4), can be found under Options > Personal > MSN Messenger Settings (screenshot #3). Or you can simply click here (thanks Ben!). Note that this option is not yet enabled* for most of you and I have no official word yet that it'll be on-by-default (which could be somewhat annoying).

*At the time of writing this FAQ.