Shoutbox

Alright what Absorbation posted isn't going to help you as that refers to your display pic, not your contacts'.

Try clearing all display pics from their file location and restarting Messenger, hopefully this will cause Messenger to re-download all of your contacts' display pics to your computer.

You can do this by clicking on "Run" in your Start Menu, and enter "%temp%" (without the quotes) and press enter. There should be a whole pile of files and folders. Open the folder named "MessengerCache" and delete all files inside. Then restart messenger and hope for the best...