For Windows Live Messenger you follow the instructions at http://windowsvistablog.com/bl.....tacts.aspx
For Windows Live Mail I'm not sure, I looked and couldn't find a way. I can only assume I was mistaken and only Windows Live Messenger Encrypts the contacts list.
Edit: I just looked some more and saw I did get the two confused.
Windows Live Messenger will sync to a subfolder of Contacts.
Windows Live Mail will not. You can access all your Windows Live Contacts with it and they are stored only in Windows Live Mail not Windows Contacts.
Sorry about the mistake.
It seemed like the folder was created when using Windows Live Mail but I guess not as when I close Messenger the sub folder doesn't get changed at all.
Edit 2: I just looked and it appears the Contacts are synced to C:\Users\[UserName]\AppData\Local\Microsoft\Windows Live Mail\Contacts\[WindowsLiveID] in a format that probably can only be used by Windows Live Mail. I don't understand why Microsoft did it that way instead of syncing to the normal contacts folder in a way that can be used outside of Windows Live Mail.
Note: In case anyone sees this thread and is confused on the product names and functions, here is a list:
Windows Mail - Microsoft email client included in Windows Vista. Updated version of Outlook Express that was in previous versions of Windows.
Windows Contacts - Microsoft contact storage program included in Windows Vista. Updated version of Windows Address Book that was in previous versions of Windows.
Windows Calender - Microsoft Calender program included in Windows Vista. Program is new to Windows Vista.
Windows Live ID - A login that is valid for all Microsoft web sites. The name is an email address normally "firstname.lastname@example.org" or "email@example.com" though any email address can be used. There are two types of accounts. One is an account that can be used to receive email. The other can only be used for Messenger and other services. You cannot convert between one account type to the other. This service used to be called Passport.
Windows Live Messenger - Microsoft Instant Messenger client. Used to be called MSN Messenger.
Windows Live Hotmail - Microsoft free email service. Used to be called MSN Hotmail or just Hotmail.
Windows Live Contacts - Microsoft free online contact storage service. Used by Windows Live Messenger for the buddy list and Windows Live Hotmail for an address book.
Windows Live Mail - Microsoft email client that is an enhanced version of Windows Mail for accessing Windows Live Hotmail and Windows Live Contacts. This email client was named Windows Live Mail desktop before. One thing sure to cause confusion is Windows Live Hotmail was named Windows Live Mail at one point too.
Windows Live Calendar - Microsoft online free calendar service.
Microsoft Office Outlook - Microsoft client for email, contacts, calendar and a couple other functions.
The client itself costs around $90 (Price from Newegg page) though it can be gotten as part of an Office bundle.
Outlook Connector exists to use Windows Live Hotmail, Contacts and Calendar with this program. The Calendar access requires a Premium subscription to something. According to the Connector Info page it's MSN Premium. If true then the cost is $9.95 per month to use it.