jeesh.. well after looking at that ms outlook blog mess.. I spotted someones solution to this issue of outlook connector not working...
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1.) Make a back-up .pst file (for all accounts).
2.) Delete EVERY e-mail account including the accounts connected to Outlook Connector. I had to create a temporary .pst file / Personal Folder in outlook. Go to File -> Data File Management -> Add (in Outlook 2003)
3.) Close Outlook and un-install Microsoft Outlook Connector.
4.) Reboot computer (just in case).
5.) Re-install Outlook Connector.
6.) Start Outlook and sign-in to Microsoft Outlook Connector.
7.) Outlook connector did not sync for me the first time. Closing then re-opening Outlook seemed to make it work.
8.) Wait for everything to sync then load your .pst file(s).
9.) Re-create all of your non-Microsoft Outlook Connector e-mail accounts.
10.) Delete the temporary .pst file you created in step number 2 if you are not using it now.
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my method was to just delete everything that wasn't a .pst file..and then delete every thing relating to hotmail accounts including .pst files.. and any 0 byte junk..didn't bother with restart/reinstall.. and its all worked, so thats quite a few unnecessary steps skipped 
opened outlook, all pop mail/archives are there.. hotmail accounts were still listed.. but inbox & etc was empty.. but then after using send/recieve for hotmails accounts, it starts downloading the headers again, at least now its synced upto the last email.. so hopefully now it just stays upto date.. and i won't have to do this again