I just looked up my hosts file and it certainly shouldn't be empty, there's a description in it, as to what it does, and then the entry:
127.0.0.1 localhost
Just add the two lines you posted before to that file.
Dunno if that'll fix the problem with MSN but it's certainly worth a try.
Even if there's nothing in that just paste the two lines in there.
EDIT: Now I get it, you can't see anything in the etc folder right?
1.) Open Explorer
2.) in the menubar go to extras (respectively the menu left of the "?" help menu)
3.) Pick the last option
4.) Select the 2nd tab in the new window
5.) Uncheck the box "Hide protected systemfiles (recommended)" or something like that
6.) Apply the changes to all folders
Now you should see the file
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