I haven't had any problems with Gizmo and adding Yahoo or MSN buddies, Maybe a bad install of Gizmo? Try uninstalling and reinstalling Gizmo.

Did you start a chat with the user that says Setup_y_MSN then enter the number that says to add buddies? Choose MSN and enter your username and password for MSN?

I agree Pidgin is better for IMing. I use both. I use Gizmo for internet calling and Pidgin for IMing.