Windows Live Messenger has a nickname feature. This is why it has been left out of Messenger Plus! Live.
Right click a contact, and click 'Add Nickname'. You can also insert colour codes, formatting codes, etc.
Edit: I see you editted your post...
quote:
Originally posted by Ad Inferos
have you used the Custom names feature of WLM, it sucks.
It has been suggested by many people for the custom names feature to be added to Msg Plus! Live, but I doubt it will return. The WLM nickname feature does the job.