This is a known issue:
http://www.msgstuff.com/news/post/282/
Details of the cause and fix are in the post above. But to makes things quicker (thanks to Jonathan Kay):
quote:
If you've done this, do the following (applies to Windows Live Messenger 8.1) ...
On XP:
Sign out of Messenger. Click Start, then Run, type:
%userprofile%\local settings\application data\microsoft\windows live contacts
and click OK. Right-click the e-mail folder corresponding to your email, and choose Delete. Then sign back into Messenger.
On Vista:
Sign out of Messenger. Click Start, type:
%appdata%\..local\application data\microsoft\windows live contacts
and click OK. Right-click the e-mail folder corresponding to your email, and choose Delete. Then sign back into Messenger.