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Windows Live Messenger, MSN Cam Error

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Last Modified: 2013-11-29
Live Messenger Version 2009 Build 14.0.8089.726
with Messenger Plus! live 4.84.0.384 (not sure if this affects).
Logitech QuickCam S5500.

When I view the Cam under Tools -> Audio Video Setup, it works perfectly.
Other application such as Skype also works.

When I click on "Start a Video Call", it works, but my video looks distorted, my image becomes taller.
the other party looks fine.

When I click on "Show my Webcam" or "View this Contact's Webcam", it gives me the error below almost instantly.

"has declined your invitation to start sending webcam"
"has declined your invitation to start viewing webcam"

It only affects some or my contact, and not all.. I'm puzzled about this.
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