When Windows Live Messenger has been firstly introduced, I read from Messenger blog that the contact list limit has been increased to 600 contacts. I don't know if they increased it more by now.
Hint: Counting contacts is very easy. You must click on up and down arrow in the "search contact" bar at your contact list and deselect "Show all contacts" and then select "Sort by status" and then collapse every contacts group (Online/Offline/Mobile) and then count and add the numbers for each group
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