Go to Hotmail.com
sign in to your email
There's an MSN button on the left side under the Inbox, activate it, and it logs you in.
It's like a mini-msn for the Web Browser directly connected to Hotmail / MSN.
If that works, then your MSN has problems
Get Your Uninstaller, successfully uninstall MSN and all of its registry keys.
get Search Everything and type MSN, and other keywords related to Windows Live Messenger, and selectively delete them.
Hopefully everything works out, and you can login through the MSN Software again mate.