I found this while scratching my head at the crappy Pop3 Hotmail usage with Android. How to Add Hotmail IMAP in Android | KhimHoe.Net I'm running CM7, and did not see Exchange when I initially set up "New Account". So, enter your hotmail info, then select "Manual Settings". Proceed from there. I can now sync my folders, my emails all stay read/unread, and it not longers tells me my read emails are new/unread.