The biggest problem with Hotmail is the sheer volume of spam that arrives each day. The filtering is good so only the emails I want to get through actually hit my iPhone inbox. But I find it's necessary to look through the spam folder often just to make sure something I don't want in there hasn't been filtered into spam.
I also have mail.com and yahoo email accounts but they've been so awful I mostly just ignore them.
iOS + Hotmail (setup for Exchange) is the perfect combination. In fact it's the primary reason I bought an iPhone. I can literally hear the button on my mouse click "send" and my girlfriend's iPad email notification goes off--it's THAT fast!
I have a custom domain pointing to the account.
I get no spam at all. I use the option to delete spam permanently and never see it.
iOS automatically syncs the contacts and reminders too. Very pleased with the integration.
The bar has been raised and I will no longer settle for anything less than full contact, calendar and email synchronization. No more POP. No more IMAP.