Hmm, for Q1 I believe, if you used a the same hotmail account for both XBox and MSN, it will work. Of course, your friends would have needed to do the same as you have done, and then sign in and everything. But yeah, it works. Edit: Wait, you say you've not added their MSN? Then I believe your going to need to do that first off. I may be wrong though, cause I have my friends added on MSN and Xbox.