Is your email address '.hotmail.com' or '.msn.com'? If no, maybe there are some problems preventing you signing in. It works fine for me though.
Btw, did you try the MSN Web Messenger? Does the Web Messenger let you log in?
EDIT: This shouldnt be placed in this channel isnt it?
EDIT 2: You also can see this website:
http://www.msn-problems.com/solve-msn-messenger-p...gn-in-80072f0d.php