Gmail has a nice tutorial on how to export your Hotmail contacts into Gmail. I've done it.
But, I'm still using Hotmail in parallel. I can't seem to let go of the Hotmail account I created in March, 1997.
I agree with the Outlook advice. I run it that way on my home PC. Opening large contacts through Outlook will typically lock it up, however. Sending through Outlook is nice because you can turn on read receipts--something you can't do in web Hotmail.