I thought it was completely ridiculous, and no way I wanted something like that hooked up to my name. They lost a customer and I've wondered if there were many other people didn't like the name.
But outlook.com has opened up lately and you can still get a decent username at it. It is supposed to be an improved version of hotmail. That name sounds good to me.
I registered an account, haven't used it yet, but expect to soon. Not sure how it will stack up to gmail, but worth a try.