I hope the following works. It involves deleting all your display pictures to fix any corrupt information, and then adding them again.
Go to the folder
C:\Documents and Settings\Username\Application Data\Microsoft\MSN Messenger\number, with Username being your Windows username and number the number that symbolises your email address. This number is pretty hard to figure out, but generally, the first one (if you see more than one) is the right one.
Go to the first folder and delete the folder called UserTile. If this doesn't remove all your display pictures, delete this folder for all numbers. Reboot and add your display pictures again; your problem should be fixed
/ 
