The solution is really quite what you'd expect with Microsoft..sigh..
1. Simply UNINSTALL the CURRENT Windows Live Messenger 2009 (such as version 14.0.8064.0206)
2. Install the PREVIOUS Windows Live Messenger 2008 (such as version 12.0.1471.1025) -- download link:
http://www.microsoft.com/downloads/d...d-4b0b14186556
..do this for both systems and you'll be ok.
There is a little-known issue with Vista and showing your Live contacts... how stupid, huh?!!
John