From my experience (setting up my housemate's GMail account) it's actually a very simple and painless procedure, and doesn't seem to require any settings change in the Hotmail account.
From the aforementioned post from Microsoft, the basic details for the import are as follows:
POP server: pop3.live.com (Port 995)So the steps in setting up your account for GMail are as follows:
POP SSL required? Yes
User name: Your Windows Live ID, for example firstname.lastname@example.org
Password: The password you usually use to sign in to Hotmail or Windows Live
SMTP server: smtp.live.com (Port 25)
Authentication required? Yes (this matches your POP username and password)
TLS/SSL required? Yes
1. First log into your GMail or GAFYD e-mail account (or of course create one if you don't have one yet).
2. Go into 'Settings' and select the 'Accounts' tab.
3. Down the bottom is a section titled "Get mail from other accounts" (which can be used to get your e-mail from any other POP3 account in GMail). Click the "Add a mail account you own" link in this section.
4. This will bring up a pop-up asking for the e-mail address of the account. Enter your Hotmail address here (e.g. email@example.com) and hit Next Step.
5. On this next page you now need to modify the settings (as the automatic defaults aren't quite right). Set them as follows:
- Username: firstname.lastname@example.org (obviously replace awesometown83 with your actual Hotmail username)
- Password: enter your Hotmail password in here... (assuming you trust GMail with this automated access to your Hotmail account... I do.)
- POP Server: pop3.live.com
- Port: 995
- Always use a secure connection (SSL) when retrieving mail: Tick this option
- Leave a copy of retrieved messages on the server: If you check this, your e-mails will all remain in your Hotmail account, so if you decide later that you don't want to keep using GMail for this, you can go back without any hassle. Alternatively, if you have a high volume of e-mail through this account, you may want GMail to remove them after it retrieves them so you don't have to log into Hotmail and empty the account if it fills up.
- Label incoming messages: You may want to apply a label here, so that you can easily see/sort which e-mails came through the Hotmail account. This would be useful, for example, if you want to let friends know that you've got a new e-mail address (the GMail one), you can see who's still sending e-mails to the Hotmail one.
- Archive incoming messages (Skip the inbox): If you are labelling the Hotmail e-mails with a unique label, then perhaps you don't want them all in your inbox, but would rather they're just visible under the GMail label (personally, I do this with my work e-mail account so the work e-mails don't clutter the inbox). It's probably worth checking this particular option when you first set up the Hotmail account so that all of the imported e-mails skip the inbox on the first import; once the import process has completed (it may take a few hours if you have a large Hotmail history) you can go back into the account settings and un-tick this so that any e-mails go into your inbox.
If you select yes, you'll be able to send e-mail from within GMail that appears to come from your Hotmail address, which may or may not be useful to you.
If you choose to be able to send e-mail from the Hotmail address, you'll be asked to enter the name that's used to send e-mail from that Hotmail address (perhaps you don't use your real name with your Hotmail address, in which case here's your chance to keep your real name hidden...).
Lastly, GMail will need to send a verification to the Hotmail address to prove it's actually yours (a bit of a moot point now since you've already provided a valid password, but its the same interface they use for being able to send e-mails from custom addresses...). Send the verification and you'll come to the final page.
The final page allows you to enter the verification code manually, however if you simply go to your inbox, you'll find the e-mail has a link in it to follow, which doesn't require any copy/pasting of the verification code. I can't remember the order GMail imports e-mails in, it might be the oldest first, so if you want to perform the verficiation immediately, you might want to log in (one last time, hopefully!) to your Hotmail account and open the e-mail up straight away... Otherwise just just wait 'til its finished importing and find it in your GMail account.
GMail will now start the importing process, in which all your Hotmail e-mails are imported into your GMail account. Perhaps annoyingly, all the imported e-mails will be marked as unread, even if they were marked read in Hotmail. You could use a GMail filter to fix this, or use the GMail smart select terms to select all the unread e-mails and mark them as read if this is a problem.
If you have just a few in there (less than 100), then it'll be basically instant, if you've got your entire history of thousands it might take a few hours. Either way, let it run and do its thing (you can check its status in the 'Accounts' tab in 'Settings'). I'm not sure if the Hotmail Spam/Junk mail folder is also imported this way. Chances are 99% of the junk will get picked up by GMail's (incredible) Spam filter, so it doesn't really matter, however if you have a large amount of Spam, then you'll probably notice a few get through. Remember though, that you'll be seeing the entire history's worth of Spam in one go, so don't get too put off if a handful get through all at once, and of course mark them as Spam and you're improving the Spam filtering straight away.
One final thing to bear in mind (I don't know the current policy on this, so I'm guessing to some extent) is that Hotmail used to (this was true about 5 years ago I think... and thus may still be) delete accounts if you didn't log in once every 30 days. If this is still the case, I'm not sure whether the POP3 logins that GMail does count (if they do, you're safe, and if Hotmail have given up on this silly policy you're also safe) but I guess there's a small chance that they might delete your account for inactivity if you completely stop logging into it. I really hope this is not the case, but it's Microsoft, and there is no cure...
Good luck, and (for those new to GMail) enjoy the much improved GMail interface... try out searching, navigating around (without image ads all over the place), labels and filters. (: