After 2 weeks of trying to get this working, probably 6 hours work all together. I’ve finally found a solution.
I was getting error code 81000306 everytime I tried to login from Live Messenger both version 8.0 and 8.1 beta. Also Gaim and Trillian could not connect to MSN.
Tried Safe Mode with Networking, Disabling Services, Uninstall, Reinstall etc.
Anyway it turns out Windows Vista has a new facility to tune the size of the receive packets it receives, I guess this helps with large file transfers. This ‘Receive Window Auto-Tuning Level’ seems to be incompatible with my ADSL Router (NetGear DG 834). The solution is to either to disable it or change the tuning level to restricted.
This is the command to view the autotuninglevel
netsh int tcp show global
This is the command to disable it. disabled: Fix the receive window at its default value.
netsh int tcp set global autotuninglevel=disabled
This is the command to return it to the default normal setting. normal: Allow the receive window to grow to accomodate almost all scenarios.
netsh int tcp set global autotuninglevel=normal
This is the command to set it to restricted which is what I ended up using, so I get some benefit from autotuning. restricted: Allow the receive window to grow beyond its default value, but limit such growth in some scenarios.
netsh int tcp set global autotuninglevel=restricted
BTW to run these commands you need to right click on the command prompt shortcut under start accessories and select run as administrator.