i have seen this issue when internet got slow and its speed become down and 
only with hotmail account not with gmail.. now working fin for me 
can you please attach the msn butterfly debug log file and jabber log file when 
this happen ?
you can get it from help ==> debug menu

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You received this bug notification because you are a member of Desktop
Packages, which is subscribed to empathy in Ubuntu.
https://bugs.launchpad.net/bugs/928767

Title:
  Since latest update Gtalk and MSN no longer will connect

Status in “empathy” package in Ubuntu:
  Incomplete

Bug description:
  Since updating I am no now longer able to log into MSN or Gtalk using
  empathy.

  On MSN is says network error, on Gtalk it says password required. I
  have tried to recreate the accounts in "ONline Accounts" and tried
  manual account in empathy.

  ProblemType: Bug
  DistroRelease: Ubuntu 12.04
  Package: empathy 3.3.4-0ubuntu1
  ProcVersionSignature: Ubuntu 3.2.0-12.21-generic 3.2.2
  Uname: Linux 3.2.0-12-generic x86_64
  ApportVersion: 1.91-0ubuntu1
  Architecture: amd64
  Date: Wed Feb  8 11:38:26 2012
  EcryptfsInUse: Yes
  InstallationMedia: Ubuntu 12.04 LTS "Precise Pangolin" - Alpha amd64 
(20111129.1)
  SourcePackage: empathy
  UpgradeStatus: Upgraded to precise on 2011-12-21 (49 days ago)

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