Using pop3.live.com, on Port 995 with SSL! Also using smtp on Port 587, with SSL. Not a Plus account, and this was the default configuration that Mail accomplished as soon as the Create button was clicked.
There can be periods of getting password prompts if left to auto check for new messages. I also set this up in Mail 2.1.4 in 10.4.11, with those same port settings. Working as I post, but I keep it set to only get new mail manually, but it can work on auto for long periods of time. The servers may be a little weird with Mail?
Ernie