No you cannot on WLM as display pictures are resized on the client as they are recieved - therefore a plugin of some type would be required on all your contact's computer as well to achieve similiar funtionality to that of MSN Messenger 6.x.
Note that this has never been a feature of Messenger Plus! but was a feature of SPNG (Stuff Plug New Generation). A new version of this will be released for WLM just called Stuff Plug. A release date is not set but you can check here for updates
http://www.stuffplug.com/
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