Steve Kafka, PM of Hotmail, today blogged about the new features of the "M5" release of Windows Live Mail beta [codename Kahuna], which is expected to be released Thursday. The feature list includes:

 - Hotmail classic theme with new improvements and features for browsers other than Internet Explorer 6 or later 
 - Pick your own colour scheme 
 - Offline mail and more with Windows Live Mail Desktop client 
 - New user wizard 
 - Configurable reading pane, plus toolbar control to change it
 - Outlook-like shortcuts 
 - Contact picker when composing a new message 
 - Find in contacts via word wheel
 - Spaces contact card integration 
 - Custom filters/rules for incoming mail 
 - Check for new messages, empty all junk mail, and empty all deleted items buttons 
 - New OOBE [out of box experience] for first time users to discover new features and change options 
 - And overall performance improvements

Read the mail call space for more details and check out our screenshots: Hotmail classic, Colour picker, Pink scheme, Windows Live Mail Desktop.

@Matthew