Are you trying out the current Windows Live Messenger Wave 4 Public Beta? You might receive the error code 81000395 when you try to sign in. The Windows Live team has published a workaround for this error code. A permanent fix will be included in the Wave 4 Final. Here is the workaround:

1. Open Windows Live Messenger, and wait for error 81000395.
2. In the sign-in window, click the Forget me link.If you use multiple accounts on that machine, you should only need to click (Forget me) for the account that is causing an error.
3. Retry to sign in to Messenger by entering your Windows Live ID and password.

Does this work for you?

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