Well, I've been using their revamped "interface" since they first released it as a "beta". BTW, it does have "mark as read", but that's done with the right-button context menu (yes, they're trying to do some kind of Web Outlook interface.) It isn't that bad, but I do hate its IE-centric insistence.
The funny thing is why I opted in for this in the first place: it was to jump from 250Mb to 2Gb inbox space. Hotmail is the only service I know of that strayed behind a lot on Inbox quotas.
Yahoo offered 25Mb, Hotmail 2Mb.
Yahoo ups to 100Mb, Hotmail 2Mb.
Gmail comes up, offers 1Gb; Yahoo ups to 250Mb .... Hotmail's *still* stuck at 2Mb.
Hell, when Hotmail decided to up themselves to 250Mb, they did it *by region*; meaning all non-US users were still stuck with 2Mb. Fortunately, a temporary change I had made in 1998 left my Hotmail addy with a US RL address, so I got the upgrade. The only thing MS got, was that most of their non-US users suddenly "moved" to Beverly Hills; Hotmail asks for a Zip Code, and well, there's that early 90's show with a zip code for its title!!
So basically, Hotmail ceased to be the main option for most because Gmail, and even Yahoo! were giving giant inboxes, while Hotmail stuck to 2Mb's for way too long (2004?), which given Hotmail's spam volume meant that your inbox was filling up in a matter of hours. Those of us who still have Hotmail addys, have them only because of MSN Messenger. Otherwise, I'd hint Hotmail would be dead for quite a while by now...