You could alternatively unhide your hidden files and delete the contacts cache. This can be done via Control Panel => Appearance and Personization => Folder Options. Under the view tab, you should see an option to Show hidden files, folders, and drives. Click and apply that option.
Now head to your Local disk C:\ and goto Users\(Your Current User Profile Name)\AppData\Local\Microsoft and delete the folder Windows Live Contacts, this should help if you have that problem.