I think i have cracked this!!!
Anyone who has this problem;
Uninstall EVERYTHING to with Windows Live, MSN and Plus.Also stuff like Smiley central just to be safe .
Then go into Program Files and delete any folders relating to the above programs.
Then reinstall Live Messenger and Live plus. It should work normally.
Once you check that it works, you can reinstall everything else.
Hope this works for you. It was what i done. Please refine the idea if there is any unnecessary uninstalling needed to be done!