In short, the "hack" is to generate enough duplicate content on your competitors site, so that Microsoft's Live.com search sees it as spam and then delists the site from the index.
How do you do that?
(1) Check the competitors site to see if a non-valid URL returns a 200 status code with any header checker tool. (2) You create hundreds of URLs like somedomain.com/index.html?test=test and somedomain.com/index.html?test=test1 and somedomain.com/index.html?test=test2, etc. (3) You get MSN to index them by putting them in front of MSN
You wait and according to this guy, your competitors site will drop out of the index.
The post offers a solution to this potentially bad loophole. And Brian M in the forums suggests that using a 404 but the 404 also causes some indexing issues.
Forum discussion at Search Engine Watch Forums.