Hi.
I am facing the exact same problem as the OP, in fact for me it has been going on since mid-December 2007. It has NOTHING WHATSOEVER to do with the anti-virus software because i have tested it by now on FOUR different computers, one of which doesn't even have any anti-virus product or firewall installed. On my own PC (Vista) this problem started all by itself, in the morning it worked fine and evening that same day = no longer, without any Windows or AV update having taken place.
Additional to the error message that the OP encounters there is the following when hitting "send/receive" error:
"Windows Live Mail could not download the requested message. To send and receive messages in your Hotmail account, go to
Sign In on the Web, or try again later. To get help from Windows Live Customer Support, go to
http://support.live.com and click Windows Live Mail in the list of services.
Subject 'whatever the message subject is'
Server Error: 0x8000FFFF
Server: 'http://mail.services.live.com/DeltaSync_v2.0.0/Sync.aspx'
Windows Live Mail Error ID: 0x8000FFFF"
Tested with four different ISP's, four different machines (in three locations, one was a laptop), Windows Vista Ultimate 32bit, 2x XP Professional (one SP2 fully updated, one SP2 pirated w/o ANY updates) and XP home SP2, ADSL, leased line, WiFI and dialup internet access, without AV, with Norton 360, Avast! free edition and AVG, each on and off, Windows Firewall on or off, various Windows Live Mail Desktop versions (betas and final).... WLMD uninstalled, reinstalled, accounts removed, accounts re-setup etc etc etc... THREE different e-mail accounts, two of which are Hotmail, one is live.com.
NONE WILL DOWNLOAD THE MAILS, only the headers!! SENDING works fine! But all three still sync fine in Outlook Express or Outlook XP.
And since end December Microsoft's replies to my support-seeking e-mails look machine-generated, saying "we are working on it, but can't give you a time frame".
I came to the conclusion that Live Mail Desktop and specifically the "DeltaSync" is a sack full of bugs, no more. Zero support, lots of frustration. And i can no longer use e-mail accounts that i had since 9 years.
Thanks, Microsoft.
Thanh