Thanks Naseer, this worked perfectly
Using Vista and a Squid server, added the 2 exceptions and now have no problems connecting.
Posted as a reply to:
Re: WLM 2009 and 80072ef3 error
i'm in a corporate environment behind proxy as well. Also faced the same issue.
Solved it by adding https://*.contacts.msn.com
under IE trusted sites and
*.contacts.msn.com under Proxy settings>Exceptions.
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