The new versions of Hotmail has minimum system requirements of Firefox 3.0 which will not run on your OS.

You will need to use an alternative browser for Hotmail, or access it via a mail client. These links may help:

• Frequently Asked Questions - Accessing Hotmail on mail programs
• Send and Receive Windows Live Hotmail emails from a Mail Client

Also, I have to remind you that the version of Firefox you are using at the moment has been discontinued and is no longer supported. On top of this, it has known unpatched bugs and security problems. I urge you to update to the latest version of Firefox, for maximum security, stability, performance and usability. You can get it for free, as always, at getfirefox.com.

The OP is on Windows 98, so can't update to Firefox 3 versions.

http://www.mozilla.com/firefox/system-requirements-v3.html - Firefox 3 System Requirements
http://www.mozilla.com/firefox/system-requirements-v2.html - Firefox 2 System Requirements

Another browser that you can look at is SeaMonkey.

http://www.seamonkey-project.org/releases/seamonkey1.1.19

You should update your "Shockwave Flash 9.0 r28 " version to the last Flash 9.0 r246 version. Flash Player 9: http://www.adobe.com/go/kb406791

I have firefox 3.6.9 which updated a couple of days ago (Aug. 25,2010). Since then I too cannot cannot write or send email from hotmail (live.com) and continue to get the you need to upgrade your browser note. I can get into live.com but cannot fill in the "to" nor can I reply to an email.