I was having the same problem and contacted Hotmail, this is the response I was given:

"the Photo Upload Tool that you use with Hotmail and with Windows Live Mail is incompatible with the recently released Windows Vista operating system.
We have identified the source of the issue, and our product development team has developed a version of the Photo Upload Tool that is compatible with Vista. The new version of the tool is scheduled to be released in April 2007."

Hope this helps.

EggHeadCafe.com - .NET Developer Portal of Choice
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starfishblue wrote:
> I was having the same problem and contacted Hotmail, this is the response I was given:
>
> "the Photo Upload Tool that you use with Hotmail and with Windows Live Mail is incompatible with the recently released Windows Vista operating system.
> We have identified the source of the issue, and our product development team has developed a version of the Photo Upload Tool that is compatible with Vista. The new version of the tool is scheduled to be released in April 2007."
>
> Hope this helps.
>
> EggHeadCafe.com - .NET Developer Portal of Choice
> http://www.eggheadcafe.com


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