In a new post to the Inside Windows Live blog, Microsoft's Dick Craddock explains that while spam gets all the attention in the email world, there's a much bigger problem, called graymail, which is unwanted email like newsletters that's not technically spam. Since users report so much graymail to Microsoft as spam, the software giant is taking steps in Hotmail to reduce the problem.

"75 percent of the email messages that people report as spam are really legitimate newsletters, offers, or notifications that you just don't want anymore," he notes. "We're excited to announce five powerful tools [in Hotmail] to help you take control of your inbox, get rid of this graymail, and keep track of the email that's important to you."

These tools include:

Newsletter category. Hotmail already provides automatic categorization of social updates, messages that contain Office documents, messages with photos, and shipping notifications. Now, it will do so with newsletters as well, and Microsoft claims it will be 95 percent accurate at first, and then get better as you use it.

One-click unsubscribe. Ever get an email newsletter you never subscribed to or simply don't want anymore? And then you go to unsubscribe and there's no obvious way, or any way at all? With one-click unsubscribe, Hotmail will contact the site mailing you, use Sweep to clean up your inbox and remove all the old newsletters from that sender, and send any new email from that sender to the junk mail folder.

Schedule Cleanup. This new tool works behind the scenes to keep your inbox organized. You can configure it, on a per sender basis, to keep only the latest message, delete messages after certain time intervals (3 days, 10 days, 30 days, or 60 days), or automatically move messages to a certain folder as they get old.

Improved flags. Hotmail has supported flags for some time now, but with an upcoming Hotmail update, this way of finding important messages is going to get even more powerful. Flagged messages will be pinned to the top of the inbox and stay there as newer mail comes in.

Custom categories. In addition to the built-in categories, Hotmail will soon add the ability to create your own custom categories, backed by Sweep and Schedule Cleanup, so you can organize your email as you wish. Custom categories show up in Hotmail's Quick Views right next to the regular folders.

Check out the Inside Windows Live blog for the full details.