I read through the privacy statement, and to me this just seems like one of those typical spam hoaxes. I don't used hotmail though so I don't know for sure.
But I do know one thing. If you have received spam in the past, it will ONLY get worse. If you are receiving spam today, unchecking some box won't do crap. My boyfriend had an hotmail account, and he started out by getting one or two spams a day, and now he gets about 100 spams a day. Yes, I meant to write 100.
The internet is going so utterly commercialized that it's pathetic.
Bookmarks