Found this on another forum and it works: 
In ten easy steps, which will take only a few minutes, you get 250mb extra storage room!
This worked for me but backup your e-mails and addresses first in case anything goes wrong.
1:
Log in to hotmail and go into ?Options?
2:
Go to the submenu ?my profile? and choose from the dropdown-menu/fill in the following:
Country: United States
State: Florida
Zipcode: 33332
(make sure the birthdate is set to a date/year which indicates that you are older than 13!!)
3:
Save the information and go back to the ?Options? screen
4:
Go to the ?Language? submenu
5:
Change the language to ?English? and save that information
6:
Click on this link
If that didn't work try this
or this
and press ?Continue? until you arrive to the ?Close Accounts? screen
ATTN Backup your e-mails and/or addresses just to be sure!!
7:
Now press ?Close Account? (your account will NOT be lost!! Read the following steps if you don?t believe me )
8:
Now go back to hotmail.com and log in with your old e-mail address and password
9:
Now you will get a message that your ?Reserved Account? has been activated.
DONE!
Or not?
Your ?Inbox? is now 25mb instead of the former 2mb or the 250mb I promised you.
If all went right, your e-mails and addresses will all still be there!
But why 25mb you ask?
You get an e-mail from hotmail.com:
This means that you?ll have an account for 25mb (still a lot more that 2, right?!) for about 30 days. Microsoft will bump it up to 250mb after that!
10:
Make sure you?ll keep the language, country, etc. settings as they are now.
After /Microsoft/hotmail bumps the 25mb to 250mb, you can change everything back to as it was (the language you prefer!).
So don?t forget to regularly check your Inbox.
And don?t forget: This does NOT mean you have an unlimited account!!
Your account will still be subject to deactivation after being idle for 30 days!

In ten easy steps, which will take only a few minutes, you get 250mb extra storage room!
This worked for me but backup your e-mails and addresses first in case anything goes wrong.
1:
Log in to hotmail and go into ?Options?
2:
Go to the submenu ?my profile? and choose from the dropdown-menu/fill in the following:
Country: United States
State: Florida
Zipcode: 33332
(make sure the birthdate is set to a date/year which indicates that you are older than 13!!)
3:
Save the information and go back to the ?Options? screen
4:
Go to the ?Language? submenu
5:
Change the language to ?English? and save that information
6:
Click on this link
If that didn't work try this
or this
and press ?Continue? until you arrive to the ?Close Accounts? screen
ATTN Backup your e-mails and/or addresses just to be sure!!
7:
Now press ?Close Account? (your account will NOT be lost!! Read the following steps if you don?t believe me )
8:
Now go back to hotmail.com and log in with your old e-mail address and password
9:
Now you will get a message that your ?Reserved Account? has been activated.
DONE!

Or not?

Your ?Inbox? is now 25mb instead of the former 2mb or the 250mb I promised you.
If all went right, your e-mails and addresses will all still be there!
But why 25mb you ask?
You get an e-mail from hotmail.com:
This means that you?ll have an account for 25mb (still a lot more that 2, right?!) for about 30 days. Microsoft will bump it up to 250mb after that!
10:
Make sure you?ll keep the language, country, etc. settings as they are now.
After /Microsoft/hotmail bumps the 25mb to 250mb, you can change everything back to as it was (the language you prefer!).
So don?t forget to regularly check your Inbox.
And don?t forget: This does NOT mean you have an unlimited account!!
Your account will still be subject to deactivation after being idle for 30 days!
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