It seems sluggish as hell about any time besides the middle of the night. Way to eat your own dog food, MS. 
Well you could buy your own server…you would have the fastest email possible.
Hotmail is a blast compared to Gmail. It’s so bad that the latest version of Opera (10) brags in the release notes that one new plus is that it speeds up Gmail.
It’s not so often the servers. One big headache in slowing down things is the overuse of XMLHttpRequest. Depending on the user’s machine and browser it can get incredibly slow for a relatively small amount of visible content.
Designing web pages badly is the goal of most web designers nowadays.
Its not slow for me. If something is happening at midnight then it might be your ISP overselling your internet connection.
Hotmail doesnt tie you into their web interface and, unlike yahoo, offers POP3 email for free. Use a client like Thunderbird or Outlook instead of the web.