I don't know why outlook isn't working but the chest may add an extra complication, which is why I suggested trying outside.
You don't say 'why' it isn't working ?
Since you mention Hotmail, I can only assume that you send and download email to your Hotmail account using Outlook ?
Hotmail isn't a normal SMTP or POP3 account but web mail, which is normally accessed by your browser, although MS allows Outlook (and OE) to be able to send and receive Hotmail, but it doesn't use SMTP or POP3 protocols, but uses WEBDEV or something like that to convert hotmail. Because it doesn't use the SMTP/POP3 protocols avast can't access this account.
You need to have a zip program, 7zip, winzip or RAR, I would say 7zip is the easiest to work with when it comes to setting a password as it is clear on the screen.