In case anyone is curious how Hotmail goes about fighting spam, there is a description of it here.
I am not involved in Hotmail's spam fighting but I know many of the guys who work on it. We use some of the same technology in our own filters, including Smartscreen, but we use it differently than Hotmail does. For a less descriptive way of how we do our filtering, you can visit this page.
I think one of the biggest differences between the two services is the way that we handle false positives. Hotmail uses a user-feedback-loop to adjust their spam filtering engine (perhaps you've received an invite to the Prevent Junk Program) in order to set their filter settings. In Exchange Hosted Services, we review all of our false positive submissions manually and make adjustments that way. I think that gives us an edge (no pun intended... yet) in our service. The ability of humans to interpret the content of email works a little better than machine categorization.