Our friends in Redmond have started officially launching Windows Live Hotmail this morning.

The new service includes some Web 2.0 functionality -- AJAX navigation and improved sorting, specifically -- that its competitors (i.e., Google and Yahoo) have featured for a while, and at the same time raising its storage max to 2 GB in an age where others have already dumped such storage caps entirely.

Later this month, the new offering will include Microsoft Outlook Connector beta. The service allows users to view and manage their Windows Live Hotmail using desktop Outlook, a usability convenience for those who like Outlook but don't have access to their own e-mail server.

Pssst... even if you didn't beta, here's how to get yourself a "signature badge." We won't tell.