OS X 10.4.8 and YM 3.0 beta1

I have a friend (let's call him xzy@yahoo.com) in my contacts list. All was fine for the past 2-3 years. Recently a window pop up asking me if I allow this friend (xyz) to add me to his contacts. I clicked "Allow". Then YM asks me if I want to add him to my contacts, and I said "Add".

Well, every time I start YM now I get this stupid dialog, no matter if I say Allow or Deny, this window comes up EVERY time I log on to YM. I removed my friend form contacts, I added him again, no matter what I try it does not go away.

No it seems that YM accepts two types if IDs, Yahoo ID and Windows Live IDs. Not sure when this happened, and I suspect that this guy got a Window Live ID and now he log on to his YM with this new id and he want to add me as his friend, but something is not right.

Any ideas? Thanks a lot. And Happy Holidays.