Yep, pick me, I know the answer. The problem here is that when you are typing your name in, in previous MSN versions it would make a sound and not let you type anymore after you reach the 128 character limit.
For some reason with WLM when you get to the 128 character limit, it does not stop you fom typing, and I believe it allows you to type another 28 characters. The next time you sig in however, it will say that there is an error, and hence you will not be able to sign in. This is solved by clearing your messenger cache, as mentioned in the posts before me. When you clear your cache you will lose your defalt background and your MSN name will revert back to what it was before you changed it.
Yeh so you just gotta count and make sure you don't go over the limit. And yes characters you use to format your name count for the 128 limit as well. Hope this helps - and if it doesn't don't even BOTHER sending help to the Microsoft help team, because I tried that and they were UTTERLY hopeless, so I figured out the answer myself