The idea is to give users a safe way to provide third parties with an e-mail address, without giving up the address they've provided to family and friends, which, if compromised, can end the usefulness of that particular account.
Each user will be able to create up to five aliases, any of which can be deleted and replaced with another at any time. Over time, Microsoft will increase that limit to 15 aliases per account, making it so that the true heavy users won't need to juggle between two or more Hotmail accounts.
CNET News: http://news.cnet.com/8301-10805_3-20030574-75.html
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