All the people on your list ARE offline, its just using your MSN 4 list.
Solutions, pick any:
1) Uninstall MSN copies so you have just one left - either MSN 4 or MSN 5, or WM5 etc.
2) Use MSN 5 fix
www.hotmailstuff.com/msn5fix.htm then you should be able to use your MSN 5 list without uninstalling 4.