Yes, Windows live is free to use with 5 GB of storage capacity. Very recently, Windows Live replaced the Hotmail and now even Windows Live messenger is available to be used with Hotmail/Msn or Windows live Mail.
But, in case you want more storage capacity, i.e., 10GB of storage capacity, then you will have to pay $ 19.95 per year. This more storage capacity Mail is known as Windows Live Hotmail Plus.
So, you get free Windows Live Mail with 5 GB Storage OR you need to pay $ 19.95 per year for 10 GB Storage Capacity.
But, in case you want more storage capacity, i.e., 10GB of storage capacity, then you will have to pay $ 19.95 per year. This more storage capacity Mail is known as Windows Live Hotmail Plus.
So, you get free Windows Live Mail with 5 GB Storage OR you need to pay $ 19.95 per year for 10 GB Storage Capacity.