if you would like to increase your hotmail storage try to follow this way, c's it works with me..
first go to
option =>> personal =>> my profile
change the following
"country / region" to "united states"
" state" to "new york"
"zip code" to "10001"
then click update and continue....
now we have finished the first step
now here is the important step, click on thise link below
http://memberservices.passport.net/memberservice.srf
after sign in with your email choose
"close my .Net passport account"
"dont woory, you will never loose your mail"
click "contact hotmail"
then "close my account"
after doing this steps, it will show the confirmation to close account
now go "back"
and you will see
"close my account" & "cancel"
click on "cancel" & sign in again
now click on "activate my acount"
then follow the steps "its easy like make new email"
congratulation you email storage is 250MB
"like mine"