The inability to minimize MSN Messenger into the system tray in Windows 7 is a nuisance for a many users. By running MSN in compatibility mode and selecting Windows Vista, MSN will no longer remain in the taskbar and will minimize into the system tray instead.
How to minimize MSN Messenger to the system tray in Windows 7

If you’ve applied the Windows 7 Beta watermark patch, this tutorial may not work for you.

How-to:

1) Go to your MSN folder. It’s usually located at: C:\Program Files\Windows Live\Messenger
2) Right click msnmsgr.exe and select Properties
How to minimize MSN Messenger to the system tray in Windows 7
3) Select the Compatibility tab at the top.
4) Check Run this program in compatibility mode for: and select Windows Vista from the drop-down menu
How to minimize MSN Messenger to the system tray in Windows 7
5) Click Apply, then OK, and you’re finished
You’ll need to completely close MSN Messenger and re-open it for changes to take place.