I've had a Hotmail account for years without any problems.  Hotmail generates revenue through advertising. Whether it makes a profit is another matter.

Google also gives out a couple of gigs worth of storage.  I'm actually more paranoid of Google reading my mail than I am of Microsoft.  Google knows far more about me than Microsoft ever could.

Yahoo mail now has unlimited storage which is quite cool.

As for Facebook, my wife and I set up accounts last night (after being badgered by people to do it) and from first impressions, it's crap.  I really don't see what all the fuss is about.  Perhaps I'm missing something.

With Facebook, it's scary just how much information they want about you.