Neowin.net is reporting that thousands of hotmail passwords have been posted on the internet (pastebin.com to be exact) and they can confirm that the accounts are indeed genuine.
BBC News reports that Microsoft are aware of the situation. Microsoft is currently "investigating the situation and will take appropriate steps as rapidly as possible."
Neowin.net - Thousands of Hotmail passwords leaked online.
BBC News - Hotmail accounts 'posted online'
You are recommended to change your account password ASAP.