1. How do I configure a hotmail account in Outlook?

For Outlook 2002 (XP) and 2003:
http://support.microsoft.com/default.aspx?scid=KB;EN-US;287424

For Outlook 2000:
http://www.slipstick.com/config/ol2000hotmail.htm

2. How do I set up a new account?

http://support.microsoft.com/?id=286040

3. Is there a way I can log on to Outlook and check just one of my email accounts and keep my accounts separate?

Two ways I can think of: The easiest is to have two profiles, one for each account. Select the profile you want when Outlook starts. The other way is to have two accounts within the same profile, but do not schedule either for automatic receiving. Manually send/receive for each account. That way, messages arriving will be for the account for which you clicked "Send/Receive".

4. How do I set a default email account for sending mail?

When you set-up the accounts you define the default account (Tools/Accounts) that will be used when sending mail items by default.