All web based e-mail systems have their security flaws that can be exploided.
However, provides such as hotmail or yahoo are constantly changing their security settings. What you heard of a way to hack an account is probably outdated, once someone does it once they changed the security system. Some methods work only once.
There are several places in the net were you can find info, but my advice is be careful.
Hotmail's guys (Microsoft) aren't as stupid as many people think they are, if you do something, you better spoof your e-mail very, very well otherwise they will catch you. Not only that, you better don't do it from your internet service provided or they will catch you.
Hacking is a very complicated stuff that requires a lot of imagination, time and knowledge, I wouldn't have a clue on how to do that. Really, breaking the hotmail security system would require a very skilled hacker really knowing what he/she is doing.
There is software to look for passwords, and passwords dictionaries, however, you would need a lot of patience and they only can work if the person chose a password following some pattern, if it was just a random password, you will never find it.
A last advice, be very
careful with the soft you download from the internet that says it will help you to hack e-mail accounts, if you don't know what you are doing, you probably will end up being hacked yourself
And remember, hacking is illegal, if you get caught...