So do you mean the spell checker has disappeared in Office 2007? or in Windows Live Hotmail (MSN Hotmail)
If you mean in your hotmail, then depending on your browser you could do the following.
For IE7 you can download IE7 Pro, amongst other things it has a spell checker and is a good program to have, it basically attaches itself to IE7 and that's it, you never know its there apart from the little icon towards the bottom right side of the screen.
If you have the latest version of Firefox's browser, the spell checker is usually on by default, in the case that it hasn't been then you can do the following,
At the top of the Firefox window on the menu bar, click on the Tools menu, and select Options and click the General tab.
But it is usually on by default.
If the spell checker is off in Office 2007:
Click the OFFICE BUTTON which is at the top left of some of the OFFICE PROGRAMS, next click on the WORD OPTIONS tab, next click on PROOFING (which is on the left handside of the window). You should then see all the AUTO CORRECT options, which basically tells the OFFICE program what to AUTO CORRECT as you type.
Some of the OFFICE programs may not have the OFFICE BUTTON at the top left of the screen, but if you go into WORD you should see it has this is what I have done here.