No more, ilovecats and 12345
You only have to look at lists of hacked online accounts, dumped to places like pastebin, to see that many people are using passwords which could be easily guessed, or brute forced in no time.
Your email account details could well be sitting in a text document on pastebin right now, for all to see, and use.
So, Microsoft has decided to ban the use of commonly used passwords, such as 12345, and so on.
However, you'll notice that the passwords for many hacked accounts, do not fall in to the easy to guess category, e.g. 43gbf4u3cf8sp.
The only way to keep your secure accounts almost 100% secure, is to use a long password, and change it frequently. By changing it frequently, if your account is broken in to, and your password is published somewhere, that password should hopefully be out of date, before the world and his dog are tampering with your accounts.
If you use Hotmail, you can also report accounts which may have been hacked.