First open the Hotmail Messenger and get yourself signed in.
Now once you get signed in, you will see the messenger window with the entire contact list and a navigation bar on the top. In this bar you can see the Tools option. Now go to this tools option and click it.
In the tools option, select options. A new window of options will be opened in front of you. Now click the Privacy tab here.
Now as you go to the privacy option, you can see all the list of people that you have blocked in your Hotmail messenger so far. Now here do anything you want: you can either block someone you do not want in your messenger contacts or you can even unblock someone from the list of block contacts.