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How do you determine if a contact is in your "Online List"?

Does this mean that in my "Contacts" under instant messaging that I need to have either the YAHOO field and/or WINDOWS LIVE field filled in? I have several contacts with the WINDOWS LIVE field filled in but cannot chat with them. They can see me online and initiate a chat, but when I respond I get an error message indicating "To chat with a Windows Live user, you must first add them to your online list."

Public Comments

1. It's easy. Add Windows Live friends to your contact list by clicking the “Add Contact” button (the “+” at the top of your Messenger window)—the same way you’ve always added friends to your contact list. To start IMing, your Windows Live friend must accept your invitation. Also, they must be using the latest version of Windows Live™ Messenger. If your IM sniffs out that they need to upgrade, your invitation will automatically include a link for them to download the latest Windows Live™ Messenger. Once you’re both running the latest versions and you’re both on each other’s contact lists, it’s time to get down to business. Let the instant messaging begin!