My first reaction was amusement to mild annoyance at the marketing. My knee-jerk reaction was that this was a stupid way for MSN to gain share in a market it was probably not doing well. I didn't think it appealed to too many people (they seem to target tweens/teens) and wasn't sustainable. It just seemed kinda cheesy too.
But a quick look at IM stats, indicates that MSN actually does really well in the instant message market on the PC. So this is a way to increase share in what is quite a mature market (i.e. the best case is that its growing at the rate of the population) and to catch em young. In marketing terms, when I think of it more like a substitute in brand extension, more than a product repositioning it makes more sense to me.