When hotmail becomes outlook.com, will it be contained in my home computer, or will it be “based” remotely as my current hotmail account is?

I am facing the automatic transition from hotmail to outlook. My wife utilizes outlook express, which was an installed program in her Gateway Windows XP computer.  When we had a computer crash, my wife lost all her outlook records for several months, and this is a problem.If the new outlook program is still accessed remotely online as my current hotmail program is, then it won't be an issue. Any input?