Dont really understand what you meant in the second part. But shouldnt the emoticons display as it is, like
instead of :) in MSN Messenger 7.0 BETA?
Try uninstalling the sponser(if you have it installed), and see whether it works. But I dont think the sponser should be the cause of your problem because I remembered the sponser is running almost all the time, not just only when Plus! is running.