This is the software publisher's description. 

Windows Live Custom Domains allows you to basically point your MX record to Windows Live and get free Windows Live Mail accounts, messenger accounts, and well anything you can use a passport for. No longer are any @hotmail.com or @msn.com domains necessary. You can get or use your own domain, and then enable all these great services. Plus you maintain control of your domain, so you can have your web site hosted elsewhere, etc. Only your email services are hosted by Microsoft.

This service is amazing, several months ago we migrated our email services from a hosting company to Custom Domains, and I have got to tell you guys, we have been saving loads of money since we migrated. However it's not only about the money, it's also all the handy features that come with it, for instance Windows Live Mail. When you setup your domain and create or migrate your mailboxes you have plenty invites from the Windows Live Mail program, what does that mean? A whole new sweet webmail interface (rather than the old hotmail interface), plus 2Gb of storage, I didn't have that much space when I was paying a hosting company for our services.

Some people have argued with me that Google has been giving people 2GB of store and webmail interface for a long time. But they don't understand! I'm not using a @gmail.com I'm using @Frameworkx.com, and this is what puts Microsoft far ahead on the game! They gave us the ability to have all storage space we need, a new slick web interface and the ability of using our own domain name, this is more than I could wish for!