MSN has identified two issues that were causing problems with favorites, and there is now a fix available for download.
The issues were:

1. A change was needed on the servers that store the favorites files.
2. Each stored favorite has an ID associated with it and some of these IDs were getting corrupted. Once a corrupted favorites file was on the server, any changes made on the local machine were not being properly recorded on the server.

The fix cleans up the corrupted IDs and uploads the corrected version to the server. This fix only replaces the corrupted IDs and does not touch the links themselves, so no data is lost during the process.

1. Download the tool from http://autoupdate.msn.com/fixcorruptfavs.hta
2. If you are using NTFS partition, make sure the file is not being flagged as "This file came from another computer and might be blocked to help protect this computer". To verify, right-click the file and select Properties - General, this note appears at the bottom next to an Unblock button. If you see this message, click the Unblock button.
   As an alternate, you can copy the file to a FAT partition (e.g. a floppy disk) and then copy it back to the NTFS partition.
3. Close MSN on all computers prior to running the fix.*
4. Launch fixcorruptfav.hta
5. Enter the appropriate user name and password.**
6. Click the "Click here ..." button.
   1. Once the fixed favorites have been uploaded to the server, a "Successful" message will appear.
   2. If an error message displays, verify that the Internet connection is working and try again. If the error reoccurs, note the message number and contact support by doing the following:
      1. Sign in to MSN.
      2. Go to https://support.msn.com/
      3. Under Subscribed Services/Sign In, select "MSN Premium Internet Software."
      4. Under the Technical Support link, click "E-mail."
      5. Please include the following
         1. The MSN account name(s) that received the error
         2. The error number that was displayed