Figured I'd post my solution since it's not quite in here and this is the first hit on google... For anyone still having problems with an older version of msn messenger, I'll describe how I fixed mine and then quote a quick little scroll-through solution, so hopefully that can help people out.
Right now I'm using safari version 5.1.1 and msn messenger 7.0.2.
I've had his problem once before on my MacBook Pro (it might have been an earlier version of msn messenger, I can't remember), and I fixed it using a solution having to do with the proxy settings found in the msn messenger preferences. Originally I found
this forum thread through google, and what ended up solving my problem was the 3rd suggestion from Larry Tan's post; I'll quote it here:
PAST SOLUTION:
3. Your computer's proxy settings may be incorrect. Proxy settings allow your computer to communicate with the Internet. Adjust your proxy settings by:
a. Sign out of MSN Messenger for Mac. If you are signed in automatically,
click "Cancel Sign in' on the "Network" menu.
b. Click "Preferences" on the MSN Messenger menu.
c. Click the "Connection" tab.
d. Select "SOCKS Version 4.0a" or "SOCKS Version 5.0" in the "Type" list.
e. Enter the server name and port. For SOCKS proxy, the port is typically
port 1080.
I followed these instructions and msn messenger started working again. (Port 1080 worked for me). I forget exactly when it happened, but eventually msn messenger screwed up again. I gave up on it for a long while, just today I screwed around with the settings enough to fix it. I followed the advice posted by bluboi and jdaniel (quoted below), but msn messenger still gave me the same message "Sign in to Microsoft Messenger failed because the service is not available or you may not be connected to the internet". Once I opened up and changed the msn preferences to select "Automatically configure using system network preferences", though, it worked!
I don't know how relevant this is with the newer version of msn messenger, but this is how I fixed it, hope it helps someone. Also, if you're still having problems, check that link that gave the first solution; it had a lot of suggestions on the page.
CURRENT SOLUTION:
...most likely problem, the browsers proxy settings:
set safari as the default browser:
open safari>safari>preferences>general>default web browser>safari
Last step:
disable proxies
safari>preferences>advanced>(proxy)change settings>proxies>uncheck any checked boxes
...
...uncheck EVERYTHING on that page not only proxies but ANY checked boxes on that page...
Check that your msn messenger preferences are consistent with your browser settings:
a. Click "Preferences" on the MSN Messenger menu.
b. Click the "Connection" tab.
c. Select "Automatically configure using system network preferences"