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A Windows Live/Hotmail email account works in a similar way to IMAP. With a Windows Live email account, your messages, contacts and calendar data are between you Windows Live Mail client and the server. This works in a similar way to Microsoft Exchange, and is seen by many as a free alternative to Microsoft’s proprietary enterprise email solution.
So if you are using a Windows Live email account with Windows Live Mail and plan to reinstall the application, your data will not be lost; when you reinstall and add your username and password to create a new account, the application will synchronize with your email account and update the contacts and calendar data!
Note that for users of POP and IMAP accounts, emails will be lost, so you should take steps to retain copies of these. IMAP users will need to ensure that copies remains on the email sever, while POP users can back-up their emails in Windows Live Mail. This is done via Menu > Export Email > Email Messages, where you can select Microsoft Windows Live Mail to export to a location on your PC or network.
(Screenshots by author)