With Ubuntu 9.04 and Evolution 2.26.1 I found the following settings work with live.com emails.
Go to Edit/Preferences and edit your email account.
Identity tab
Full name - enter your email address xxxxxxx@live.com
Email address, ditto.
Receiving Email tab
Server Type: POP
Server: pop3.live.com
Security: SSL Encryption
Authentication type: Password and remember password.
Sending Email tab
Server Type: SMTP
Server: smtp.live.com
Tick the box Server requires authentication
Security: TLS encryption
Authentication: PLAIN
Username: xxxxxxx@live.com
Tick the box remember password.
Everything then seems to work fine.
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