Thank you for writing back with that confirmation and I am very sorry for the late reply. Unfortunately, since you are using MAPI account, and since you are using the "Category" from within your MS Outlook 2007 program, there is no way to push them or sync them to the webmail. By webmail, I am referring to your hotmail account being accessed from the web browser by going to www.hotmail.com. The "Category" and "Flags" in the MS Outlook program are features contained inside the MS Outlook program only, and it cannot be synced to the webmail since Hotmail (the webmail interface) also has its own features that cannot be pushed or synced to any email clients or programs like MS Outlook.
When you access your Hotmail on the web, there are also pre-defined categories and user-created categories. But these categories are "contained" only by the web interface and cannot be synced to any email program like MS Outlook. The main reason is because these properties (category, flags, etc) are NOT supported by MAPI or even IMAP protocols that MS Outlook is using. Therefore, though IMAP or MAPI accounts do a process called "sync", these internal features can never be synced to the webmail since they are NOT supported by the protocol and that these are designed only as a feature of the specific program -- MS Outlook 2007.
With IMAP accounts, and also with MAPI accounts like your Hotmail, the only information that you can sync to the Hotmail or Live servers are your email folder structure and their contents. Flags (in emails like flagging as Today, Tomorrow, Complete, etc.) and categories are retained as to where they were created. For instance, if you create the category in the webmail, they are only visible in the webmail; if you create them in MS Outlook, they will only be visible in MS Outlook as well.
I understand that this is not the answer that you like to hear and I hate to be the bearer of this bad news to you. But it will be unprofessional for me if I will not give you the real score or the truth about the matter. It will also be unfair to you if I will not provide you factual answer on this and give you false hope.
At this point you placed a deposit. I will only get credit for this if you rate positively (3 to 5 stars/faces). It is up to you if you want to credit me for my time and help or not. You can always request for a refund if you wish not to pay for this question, I will truly understand that. But please do not rate me negatively (1 to 2 stars/faces) if you want to request for a refund.
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Again, I am sorry if this is bad news to you. But I hope at least I have shed some light on your situation and save you some time.
Thank you for using our service.