HTTPS is a protocol which allows websites to securely transmit data from one point to another. It is more secure than the HTTP protocol because users cannot snoop in on requests and responses.
Many popular websites and banks provide users with HTTPS protection including Gmail, Facebook and Twitter. Though currently only Gmail uses HTTPS by default for full-on protection. You can always access sites like Facebook and Twitter using HTTPS too, but it is manual.
Today, the Hotmail team announced that they will be providing users with the option to enhance the security of Hotmail with HTTPS data encryption. However, right now this service is opt-in, so you will have to visit https://account.live.com/ManageSSL to set preferences to use SSL by default.
Other Microsoft services like Microsoft SkyDrive, Photos, Docs and Devices pages will automatically use SSL encryption. One thing to note here is that if you switch over to HTTPS for Hotmail, Outlook Hotmail Connector, Windows Live Mail and Windows Live application for Windows Mobile and Symbian will stop working. Future updates to these application may allow you to seamlessly use HTTPS across devices. Sadly, for people like me who use desktop applications to access Hotmail, the HTTPS will have to wait.
Also, if you think that using HTTPS will slow down or degrade services for you, you might want to look at the cost of switching to SSL Google incurred. It was minimal at the most.
More info on this announcement can be found at the official Windows blog.