Thanks to Nataliya for sending the email.
Look like there is a possible Windows Live ID bug which we are looking into when trying to sign up for http://webmaster.live.com,
you have to sign up for a Windows Live Id, so it seems the sign up process is being a bit problematic and asking for 8 characters when only showing 7, as she shares a screen shot below.
We hope to have this taken care of quickly so sign up can continue 🙂 Stay tuned we'll let you know the updates, I have already forwarded this on and am awaiting to hear back.
Thanks Nataliya for sending this my way.