NOTE: this will only work if you use 000webhost name server not when you use A-record to point to your site on 000webhost.
While 000webhost does not provide smtp but they give you something better they let you define your own mx server. They even give you a quick link to Google Apps.
I setup Google Apps for my domain host here at 000Webhost and define my mx record to point to "ASPMX.L.GOOGLE.COM." without quote around.
After you verify the ownership of you domain you now have a full application suite including full email with smtp, calendar, chat, etc.
I even send a test email to my domain name on Google Apps and it works.
Assuming that you already setup an account with Live then you just put something like this: "xxxxxxxxx.pamx1.hotmail.com." which you get from your Live account "domain settings" and enter in your 000webhost MX record.
I hope you find this useful!