Yeah I know Hotmail sucks..

But I have the previligie to have my email ID as
name.surname@hotmail.com. I can't get that on gmail

Also, I don't think my emai was spoofed, since it sent out emails to my contacts.

So I guess it was hacked. I was just intrigued by my mail being hacked. It has never happened to me before.

Anyway.. thanks all for uour help and input.
Greatly appreciated!