lone eagle
So you think someone has managed to eavesdrop on conversations you've had using Yahoo messenger?
First of all this is rather unlikely but not impossible. It certainly wouldn't be easy for the average PC user. Does anyone else have physical access to your PC - i.e. can they sit down and install software on it?
The easiest method I can think of would be to install a piece of software that records all your keystrokes after startup. Installing something like this remotely is not easy - doing it if you have physical access to the PC is easy.
I don't see how knowing your hotmail address would be all that much help. If someone wanted to hack into your PC in particular they'd need to know your IP address which would change every time you establish a dial-up connection (assuming you're using a modem).