Microsoft says that this is supposed to keep users safer by using a better security key, and it is also aimed to stop certificate fraud/spoofing. A user can reassure that they are visiting the legit Outlook.com website by having Microsoft's name both displaying in the address bar and in the certificate. Fraudulent sites aimed at stealing your personal info will have to work a bit harder, especially to get a certificate that has Microsoft's name on it. It's virtually next to impossible if they are going to go by a legit and well trusted certificate issuer.
Hotmail from what I know will not be getting this update. If you visit the Hotmail interface right now you shouldn't see any updates. This doesn't surprise me as Microsoft is almost desperately trying to get everyone to move to Outlook.com, and updating the old with the new will probably make the users want to move even less. Besides, if it isn't broken then why fix it? That's exactly what Microsoft is trying to combat right now -- that question.
