ok.
dont normally do extras devel but on this occasion....

***obviously uninstalled all current msn apps.***

installed MSN protocol plugin for conversations and contacts 0.8
1) I can now initiate a conversation with any of my contacts

2) my contact clicks the 'call' button on their pc's msn it just rings and rings and rings then eventually it says .. fraaaaanka@sky.com is not answering.

3) my contact clicks the 'video' button on their pc's msn it just rings and rings and rings then eventually it says .. fraaaaanka@sky.com is not answering.

so ... not working!
seems they have fixed the fact you couldnt initiate a contact in 0.7
but
broken the feature in 0.7 that a contact could initiate a call or video with you!