This happens on my N800 every time I add/block/unblock a MSN contact/buddy using another device [my tablet pc].

I solve it by quickly cancelling the Gaim log-on process on the N800 so that GAIM doesn't crash.

I then go into Tools - Accounts and delete the existing MSN account. Next I create a new MSN account with exactly the same details as before and everything works fine again.

So if you are having this problem after a change in your buddy list the above procedure may solve it.

P.S.
Don't forget to go into 'Advanced Options' and enabling 'New mail notifications'; the mail notifier works very well.
[before setting up the N800 email client for Gmail, I used to forward a copy of all my email from gmail to hotmail to take advantage of this]