Okay either it's WLM or it's Messenger Plus, because this is what happens sometimes if someone with a black name signs in..

http://img125.imageshack.us/my.php?image=wth9in.png

*dont mind the MSN screenname.. O_O some person*

also.. i noticed that when i hold shift and enter and let the chat move all the way to the bottom.. i get smiley faces popping up. I noticed this when i was typing something long to my friend online today.  Then when u hit backspace.. more of the smiley faces come.. freaky huh..

there's a video of it here..

http://s2.photobucket.com/albums/y14/shortsteve12...current=Video1.flv

someone help me with both these problems before i delete this horrible mess.

The first sounds like a minor bug in Plus!, and will be fixed at some point.
The second may be a WLM problem. You could try a clean install (delete the MSN Messenger folder after uninstall).