just got this back from the beta support team so hope this helps
If you see an empty contact list after upgrading to Windows Live
>Messenger, follow the steps below:
>
>1. Sign out of Messenger
>2. Click Start and Run and type in %USERPROFILE%\Local
>Settings\Application Data\Microsoft\Messenger\ and hit Enter
>3. This will open a new Windows Explorer window
>4. In the window that opens double click on your Messenger ID.
>5. Double click on the Contacts folder.
>6. Delete the two folders you see inside the Contacts folder.
>
>
>If you have lost some contacts:
>Each user who signs in to Messenger has a contact list. If the user is
>signed in with a Microsoft domain e-mail address, that user's contact
>list is shared between Hotmail and Messenger.
>
>1. In the main MSN Messenger window, click Add a Contact on the
>Contacts menu.
>2. Follow the steps in the wizard to add the contact.