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Outlook Express has been replaced by Live Mail desktop client on Windows 7. It's not included in the OS, but it's a free download with all the other Live tools from Microsoft. It even appears as an option in Windows Update. That also handles a Hotmail account or any other POP/IMAP mailbox.
You can't sync email with your phone that you plugged in because you don't have Outlook. But if it's all in the cloud, you'd never need to do that anyway. What's the point of having a mail enabled always connected device and manually sync to a desktop?