Chris
I was starting from being in Hotmail and not using an e-mail client such as Outlook. Then Compose an outgoing e-mail and paste the e-mail addressses from the OE or Outlook Address Book. Send your friends a good joke and then as part of the Send Confirmation from Hotmail you get back the option to Save the (new) addresses in your Hotmail Address Book and there edit (as you save) the nickname, first and last name of the sendee.
Personally, because such things were so difficult to maintain within Hotmail I relied entirely on the OE interface. However, about two weeks ago I received a MSN Announcements that told me "Please note that MSN Hotmail provides account access to Outlook Express customers as a beta service, which means support from MSN Hotmail for Outlook Express is extremely limited." plus "Before you read our tips on Outlook Express below, did you know that MSN Hotmail now works great with Outlook 2002?"
Within a few days by OE6 interface ceased working reliably with Hotmail...
Regards
Ian