Vista - photo publising error

When I try to compose a new Photo E-mail, I receive the following error
message when I click 'Send'.

"Sorry, we couldn't upload your photos. Do you want to send the message
anyway?

Recipients will see the small photos shown in this message, but they won't
have access to higher-resolution versions of your photos that they can view
online and save. To try again, click 'No' and start over."

Well, starting over doesn't work either.

I'm signed in etc - and once have actually had success - but 99/100 it fails

Steps to reproduce:

1. Open WLM
2. Click 'New->Photo e-mail '
3. Click 'Add Photos'
4. Select one or more photos
5. Enter recipient's address (in this case the recipient is using Hotmail)
6. Enter 'test' as subject
7. Add frames, brushed edges, etc., to photo(s)
8. Click 'Send'
9. Error dialog presents itself.