i had the same problem setting up my account in BIS. I have had a hotmail account since atleast 1999. I was finally able to get it work recently.
First of all, enroll in the msn live beta program (if you have not already done so). after that click on options on the right top side and in the drop down menu click more options. In the options page, click on "View and edit your personal information" and then click on settings (second option on left side) over here set up a mobile/pin option and also change your password. This I think forces your account on a different server.
Once all of this is done, save your settings and logout. Now from the blackberry browser, goto mobile.live.com and sign in once with the PHONE/PIN option. Once you are logged in and close the browser and then goto bis services and set the hotmail account up.
It worked for me. Try it, if it works do tell me. Maybe mine was also fluke or not..
OH!! and i also sent an email to microsoft saying i am switching to gmail. Don't think that helped though... HEHE
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