eWeek reports that Microsoft is working on an improved interface for the popular Hotmail web-based mail service. According to sources close to Microsoft, the new Hotmail is currently on its beta testing phase.

Kahuna is code name for an upcoming version of Hotmail that will sport a new style of interface, automatic inbox refreshing and a preview pane that will enable Hotmail users to read and respond to e-mail without ever leaving their inbox.
For this upgrade, Microsoft is expected to deliver a cleaner, better performing interface, while at the same time integrate the service with Messenger and MSN Spaces blogging tools. In my own experience with other web-based services such as GMail, not only Hotmail is lagging behind in performance, but essential functionality as well.