Apparently, Windows 2003/2008 and 64bit XP systems are not supported by the new Live Messenger.
Thank goodness I came across the following site:
It's about "Windows Live Wave 3" and it's in Chinese, but the hack is identical.
- Download the messenger wlsetup-custom.exe.
- Open it with Resource Hacker.
- Open the resource tree to "CONFIG -> CONFIG0 -> 0".
- Find the XML tag: <os productType="workstation" />
- Change "workstation" to "server" and recompile the script in the Resource Hacker.
- Remember to save the modified installer file.