As of November 9th, Microsoft has started upgrading all Windows Live Messenger users not running the latest release of Windows Live Messenger 2009.
Here is the solution for mandatory upgrades to Windows Live Messenger 2009 that will allow you to keep running Windows Live Messenger 8.5 on Windows XP with Service Pack 2 (32-bit edition only), Windows Vista (32-bit or 64-bit editions), Windows 7 (32-bit or 64-bit editions), or Windows Server 2008 :
1. Make sure that Windows Live Messenger 8.5 is turned off completely, kill the process if you have to.
2. Right click the Windows Live Messenger 8.5 icon and select Properties.
3. Go to the Compatibility tab.
4. Check “Run this program in compatibility mode for” box and select Windows 2000 from the drop down menu
5. Done ! Now Windows Live Messenger 8.5 will sign in without any issues on Windows XP with Service Pack 2 (32-bit edition only), Windows Vista (32-bit or 64-bit editions), Windows 7 (32-bit or 64-bit editions), or Windows Server 2008.
Note : Microsoft says that Windows Live Messenger 8.5 and earlier contain security vulnerabilities that can allow attackers to take over control of your computer. Continue using earlier versions of Windows Live Messenger at your own risk.