Hotmail (or "Windows Live Hotmail" to give its full marketese name) has rolled out some changes recently to the way it handles attachments. Instead of moving copies of copies of files around the web and clogging up its own servers, Hotmail now stores attachments in Skydrive ("Windows Live Skydrive") and sends just links in emails. What this means for Average Joe is pretty much nothing - it's going to work about the same as before.
What it means for Microsoft, however, is that it doesn't need to store twenty copies of every image that gets sent to twenty Hotmail users who receive the same email. That means less work and faster responses plus less disk usage on the servers. It might also mean forcing more users to sign up for Skydrive who receive emails from Hotmail users at accounts with other providers. In other words and in summary, it's a decent engineering solution with a very Microsofty catch.
Mokalus of Borg
PS - I may be pleasantly surprised if signing up to Skydrive is not needed.
PPS - And, really, it could go either way.