Wow - so I signed onto my hotmail account tonight to find that I now have 1 GB of storage there. Not only that, it's going to increase soon:
Something you can look forward to as we move forward is that Windows Live Mail has a bunch of cool features and a great new design. But the improvements I am most excited about are that once you migrate to the new service, we will double your allowances to 2GB and 120 days for free accounts and 4GB and no account expiration for premium accounts.
Not that I need that much space, but free is good.
Ever since Hotmail deleted all items in a user's "Sent" folder with no warning ahead of time (this was a couple years back), I've been a little wary anytime they go through the process of a supposed "upgrade"; I better double-check and make sure no important messages have suddenly gone missing.
It's not an OS limitation as far as I can tell, I have the buttons you're missing on my installs of Windows 7. They are all Windows 7 Ultimate version and I'm logged in as a Domain Admin on my home network.