Vista - SMS Contact can't reply to message

Using WLM 2009, Outlook 2003, Outlook Hotmail Connector

I have one SMS contact with whom I can successfuly send a txt message to.
However, that message, though it's replied to, never arrives with normal
contact settings.

Normal settings (that don't work):
*The contacts cell number is supplied by the Windows Live contact entry and
is correct. The number appears for Messenger contact properties, includes a
"+1" country code, and is correct in all respects.
*Mobile Settings are enabled for both of us, and "Allow people on my
contacts list to send message to my mobile device* is enabled.
*Privacy settings include the SMS contact, and additionally, I've unchecked
"Only allow people..."

Manually tweaked settings (that do work):
*Right-clicking the contact and selecting "edtit contact" in Messenger and
re-entering that number. This has the effect of adding the number to the
Messenger allowed list, adds a contact consisting of only the phone number
to my "contacts in <hotmail acct. name>" list in Outlook, and modifies the
format of the phone number for that contact in my Windows Live contact list
from "+1 (xxx) xxx-xxxx" to "+1xxxxxxxxxx" but doesn't mirror that new
number-only contact that outlook has.

Is this typical behavior, or am I not approaching the problem right? It's
not convenient, since it requires touching the contact properties in
Messenger.

--
Mike H