Summary: Email is timestamped by the program that creates it. Normally Window's time, date and time zone are used. Web services, however, need a little more.
How do I fix the time on my email? The time on my computer is correct, but when I send emails, the time's an hour ahead! What's wrong?
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You nailed the one thing that many people forget: the time on their computers.
However, depending on your mail service, you may need to make sure something else is set correctly as well. The "one hour off" is actually a clue that your time zone is set incorrectly.
And, of course, where that gets adjusted depends on what program or service you're using.
Let's look at a couple of common situations...
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First, as you point out, your computers time and date must be correct. That's easy to adjust: just double click on the clock in your task bar and you'll get the Date and Time Properties dialog where you can adjust the date and the time:

Notice the "Time Zone" tab? Click on that and make sure your time zone is correctly selected:

Finally, go ahead and click on the tab labeled Internet Time:

Most of the time the default settings are correct, but make sure that Automatically synchronize... is checked to allow Windows to synchronize your clock with an appropriate time server. If your clock "drifts", as some do, this will help keep it accurate.
The preceding steps should correct any time errors in an email client you run on your machine. Programs like Outlook, Outlook Express, Thunderbird, and others all use Windows to determine the time, date, and time zone.
If you're using a web service such as Hotmail, though, you're not quite done.
Hotmail, GMail, Yahoo!, and other web-based services usually ask you for your time zone when you sign up. If you ignore that, get it wrong, or move to a different time zone, you'll need to change the setting in order for the time stamps of your emails to be correct.
For example, once you've logged into Hotmail, click on the Options button in the upper right:

Then click on Personal on the left, for Personal Options, and then click on My Profile, which is described: "Change your name, location, and other personal information."
As I write this, Microsoft is transitioning to "Windows Live" for account management, so the resulting page will be a Windows Live branded page:

If you scroll down that page, you'll find a setting beneath your location where you can specify your time zone:

Press Save, and it's updated.
Services other than Hotmail have similar settings in profile, user account, or personal information settings. Regardless of which service you use, the time zone must be set properly for your email to be timestamped correctly.
Related:
Ask Leo! - Why does email take so long to be delivered sometimes?
Ask Leo! - How do I resolve my MSN Hotmail sign in problems?
Article C2871 - December 14, 2006
for those of you running hotmail under windows live you need to scroll down on the home page and in the lower right corner choose account. Under your name choose registered info. Under home location select the correct time zone. Scroll down and save. You should now have the correct time zone for your emails.
Posted by: Gary at September 9, 2009 6:51 PMGood luck.
when I say home page I am refering to signing on to your hotmail account page (like you do when you check your email account). Scroll down and select account in the lower right corner.
Posted by: Gary at September 9, 2009 6:56 PMhey thanks - i also had this time problem on my received emails for years and sometimes, for work emails, it can be a real problem. thanks once again!!
Posted by: dianne at September 24, 2009 9:23 AMIt is now fixed ! Had the wrong time zone, I guess this computer came from the west coast. I had set the time but not the zone, who'd a thought that would matter?
Posted by: David at September 27, 2009 8:16 AMThanks
Many thanks!! I couldn't figure this out!! My computer time was correct but not my incoming and outgoing emails! Thank you for these easy instructions! :)
Posted by: Linda Marie at October 5, 2009 10:41 AMThanks so much. I could never figure out how to correct the time on my emails.
Posted by: Debbie at October 15, 2009 12:46 PMI have the problem with the email time beihg always pacific time and I am in the eastern time.
Posted by: john hall at October 20, 2009 1:54 PMI have tried all of the comment that I have found.
I have checked and double checked all the setting several time but the time remains the same. I use charter.net for my email. help me please.
I also had thid prolem for years!!! thanks Gary for the simple instructions that worked!!!
Posted by: Biola Toba at October 22, 2009 6:59 PMit didn't work with me, the time on my computer is correct the problem i couldn't reach the place where i do have to change the hotmail site it self please help
Posted by: wahid at October 28, 2009 3:27 AMI CANNOT thank you enough. This has bugged me about my e-mail for so long!!! I just could never figure out what was wrong since the clock on my computer was correct....I had my MSN e-mail account saved on universal time!!? Thanks a million!
Posted by: Laurel at November 2, 2009 6:53 PM