Your MSN Messenger contact list can hold up to 600 people (online as well as offline). When you reach that limit you can add more people by allowing them to add you to their list, but you won't have a clue or get alerts when they're online unless they start talking to you. And you can only initiate a chat with them by chosing Actions from the pulldown menu, then Send an Instant Message, clicking the Other tab and finally entering their exact email address.

Microsoft has put a limit to contact lists because they're stored on their servers, unlike buddy lists in ICQ for example. The big advantage is you can access your contact lists wherever you log into MSN Messenger.