Email Hijacker?

I am hoping that someone can help me with this annoying and somewhat embarrassing problem I’m having with my hotmail account.
Over the last two months, on almost the same date (don’t know if that’s significant?) I have received an email written in a very friendly and familiar style that strongly recommends I visit the website of two (so far) “excellent” companies that offer all sorts of incredible bargains.
It turns out that these companies are based in China, and from what I can tell, appear to be in the business of offloading tatty, out-of-date electronic products. So what? It’s just junk mail and everybody gets that, but the trouble is that as soon as it hits my inbox it immediately sends itself to everyone on my contacts list – friends, business associates and just about anyone else who knows me, and of course from the way it’s written it comes across as my personal recommendation! Unfortunately I haven’t kept the addresses of the senders of these emails – my first instinct was to bin them – but they begin with a number, and then continue “Hey, how are you doing recently?…” and so on, then finish “ Regards “ and then there’s another number.
I guess I could delete my contacts list and keep the details on a Word document away from hotmail, but I’m hoping that one of you guys may be able to suggest a way I can stop this – maybe at the ‘mail in’ stage, before it can send out this rubbish “on my behalf”.
I am running Vista Ultimate with Explorer 7 and use a Belkin router with firewall. I also have Avast Antivirus Professional. Sorry this is all a bit ‘wordy’ but I thought I’d better include as much as possible. Many thanks in the hope of getting some of your expert help before the next instalment arrives!

 

Thank you very much for taking time out to reply Mr W. Sadly - and I suppose I should have made this clear in my post – my understanding of anything ‘technical’ is very limited so please bear with me! The only ‘folders’ that I can find are the standard Hotmail ones; Inbox, Junk, Drafts, Sent & Deleted – I don’t use Outlook. The rogue email arrives in my inbox and sends itself immediately to everyone in my hotmail contacts list with my name as the sender. My first reaction (probably the wrong one) has been to delete it from my inbox, along with all the individual entries that appear in my sent box from where it has gone out to all my contacts, in my name. What I have noticed, is that a number of my regular contacts appear to have some sort of defence against this, because I get a number of “failed delivery notifications” which I assume probably means that the recipients have some sort of software that stops them from accepting this junk – possibly what I need??
Anyway, I apologise if this appears rather foolish – I did try to follow the three choices that you suggested and went to the Microsoft link, but I couldn’t really get off home base with this because I don’t understand how I can locate the source of the problem which I’d hoped would have been deleted with the emails.

 

Many thanks - I will do that.