I'm trying to hook up outlook to my hotmail account and am finding myself struggling...what do I put when it say (POP3) INCOMING SERVER and (SMPT) OUTGOING SERVER?

As far as I know you can't receive hotmail mails with mail program like outlook unless you have paid account (I believe they call it premium account).
Also outgoing server should be found on your internet connection provider's homepage.

Really? Does yahoo fall under that catagory also?

You can use outlook for hotmail. See if this link helps:
http://www.slipstick.com/config/ol2000hotmail.htm

Cannot access my free Hotmail account from Outlook or Outlook Express
This topic is not available for MSN HotmailSympatico Mail.
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I do receive my hotmail through outlook. I don't have a paid subscription or anything, I don't know why.

I do as well only this was in Outlook Express, it had to be set up as an HTTP account instead of POP3. The account I use it under I've had for 5+ years though, maybe that's why?
http://www.sniggins.com/receive_hotmail_in_outlook_express.html If you want to try and see if it works