Originally Posted by Ninjaneer
Windows Live replaces the old Windows Messenger. Actually it's now Windows Live Messenger. And maybe you know live.com is now Microsoft's bigger better search engine in competition with Google. Sooooooooooo essentially a lot of crap got rebranded.
Not sure what to tell you... perhaps try uninstalling Windows Messenger and try again. I don't remember it trying to setup any security or Messenger stuff when I signed up for hotmail (more on that below).
A little offtopic but just to give you an idea of how far-reaching this crap is: in order to setup an XBOX Live (XBL) account you're forced into signing up for a hotmail account to link to your XBL gamertag. Way to boost the number of Live (err hotmail, umm I'm confused) accounts. At least this is what I faced when I got my 360... in the past I was using a non-hotmail address for XBL!
Windows Live Messenger replaced MSN Messenger as a chat client. Windows Live is an authentication service that replaced Passport.