Just tested with my Hotmail account and your settings look good. Here's what I used.
I also used smtp-mail.outlook.com and that was also successful. I followed this guide:
http://windows.microsoft.com/en-US/windows/outlook/send-receive-from-app
The only thing I did was to enable POP3 email in my hotmail account.
Other than that it sounds like maybe SGP isn't getting through to Outlook. You can try running SGP as an Admin to see if that works. If it does that likely means that when SGP was installed the firewall exception was denied.
Thanks,
Jared