Keeping your domain based e-mail intact is essential to continuing to operate your business effectively. I would suggest that you first create a Google Apps account before you detach your domain from Office Live. In order to create the Google Apps account you will need to prove that you own your domain name. There are a few ways to do this, but the easiest for me was to put the verification code into the head section of my already existing website through Office Live. Since Office Live doesn't allow editing of the HTML code then you will have to do a work around to get it to work. You will need to go here, and follow the instructions there. Put the generated code into the appropriate place to get the domain name verified. After this you can create a domain based e-mail account that will work along side the Hotmail account(s) that you already have. When you cancel Your Office Live account you can then recreate the e-mail addresses from there in Google Apps and be back up and running in no time.
There are means of taking your information from archived e-mails and contacts with you before cancelling your account, but I have no need for this so I won't go into that. I will just say that you should play around in both your OL account and your Hotmail account to be sure that you have all of your ducks in a row before you take that last step.
