Wonder if anyone can help. I have set up my Outlook so that it picks up my Hotmail, however. I cant use my contacts it, just gives me a message saying contacts can be used in web based mail.

Do you think there is any way round this?

There may well be, but this is one of a number of reasons why I used Outlook Express instead of Outlook XP in the past when I had a Hotmail A/C. Everything works just fine for Hotmail on OE 6.