How do I set my display name on MSN?
See the next section.
All my MSN contacts show as email addresses, not their display names!
There's a checkbox in the Preferences that controls this. See below.
In both cases, this is because the version of the MSN protocol that LibPurple implements does not support status messages (also called personal messages).
The MSN protocol used to not have personal messages. Back in those days, nearly every MSN user—even if they were using the official client—used their display name (also called “friendly name”) as their status message, because that was the only way to present a status message.
Adium supported this, and still supports it, by setting your current status message as your display name on MSN, and (by default) by showing your contacts' display names in the status message field.
You can fix both problems by turning off the “Show display names as status messages” checkbox in the MSN section of the Advanced pane of Adium's Preferences. This means that Adium will no longer treat the “friendly name” field as a status message, in both directions—it applies to your own friendly name, too.
That sucks!
Yes, it does. The LibPurple team is currently working on supporting a much newer version of the MSN protocol which includes support for personal messages. This means that LibPurple (and Adium) will no longer need to fake status messages using the friendly name.
When this support is finished, Adium will pick it up, and the checkbox will die a well-deserved death.