follow up:
I suspended the machine, got back, and the connection worked
I hibernated, turned it on again... the connection didn't work, tried to 
reconnect, disabled the account, enabled it gain: "network error"
then I ran killall telepathy-butterfly and everything worked.

here is an extract of the debug log:

....
....
empathy/Other-DEBUG: 05/15/2010 10:54:29.122586: 
idle_session_status_changed_cb: Session idle state changed, yes -> no
empathy/Other-DEBUG: 05/15/2010 10:54:29.122623: 
idle_session_status_changed_cb: Restoring state to 2
empathy/Other-DEBUG: 05/15/2010 10:54:29.122647: empathy_idle_set_presence: 
Changing presence to (null) (2)
empathy/Contact-DEBUG: 05/15/2010 10:54:29.155586: 
contact_list_store_contact_updated_cb: Contact:'myem...@gmail.com' updated, 
checking roster is in sync...
empathy/Contact-DEBUG: 05/15/2010 10:54:29.155668: 
contact_list_store_contact_update: Contact:'myem...@gmail.com' in list:YES, 
should be:YES
empathy/Contact-DEBUG: 05/15/2010 10:54:29.155697: 
contact_list_store_contact_update: Set active (contact updated)
empathy/Contact-DEBUG: 05/15/2010 10:54:29.156014: 
contact_list_store_contact_updated_cb: Contact:'myem...@gmail.com' updated, 
checking roster is in sync...
empathy/Contact-DEBUG: 05/15/2010 10:54:29.156079: 
contact_list_store_contact_update: Contact:'myem...@gmail.com' in list:YES, 
should be:YES
empathy/Contact-DEBUG: 05/15/2010 10:54:29.156105: 
contact_list_store_contact_update: Set active (contact updated)
empathy/Other-DEBUG: 05/15/2010 10:54:29.180330: idle_presence_changed_cb: 
Presence changed to 'available' (2) ""
empathy/(null)-DEBUG: 05/15/2010 10:54:31.277704: 
tp_contact_factory_weak_notify: Remove finalized contact 0x8d23260
empathy/Contact-DEBUG: 05/15/2010 10:54:31.277764: contact_finalize: finalize: 
0x8d23260
empathy/Account-DEBUG: 05/15/2010 10:54:40.763581: 
empathy_accounts_dialog_show_application: Launching empathy-accounts 
(if_needed: 0, hidden: 0, account: 
/org/freedesktop/Telepathy/Account/butterfly/msn/MYHOTMAIL_40hotmail_2ecom0)
....
empathy/Contact-DEBUG: 05/15/2010 10:59:48.631114: 
contact_manager_status_changed_cb: Adding new connection: 
/org/freedesktop/Telepathy/Connection/butterfly/msn/MYHOTMAIL_40hotmail_2ecom
empathy/(null)-DEBUG: 05/15/2010 10:59:48.859230: list_ensure_channel_cb: 
failed: TargetID stored not valid for type 3
empathy/(null)-DEBUG: 05/15/2010 10:59:48.958123: 
tp_contact_list_group_ready_cb: Group net added
...

-- 
MSN connection does not work: Network error
https://bugs.launchpad.net/bugs/513346
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