Hmm... so just two normal installs for two programs.
I heard things about some MSN version (I think it was 7.5 actually) not working correctly on Windows 2000, but if it worked before windowblinds... I don't know what to tell ya.
When I meantioned "patched msn" I meant with such programs as "mess patch" or "a-patch". Some programs like that have the ability to disable the flashing toolbar button.
I don't know what the problem is, sorry

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Fresh reinstalls of both windowblinds and msn might work... its worth a shot if you want.