I think I see the problem. When a user registers with WindowsLiveID we are creating a randoom password which is not used, but we are not encoding it according to the site settings password format. So it causes this error when it tries to decode it.
I will fix this for the next release. The only work around I can think of at the moment to fix specific records is to copy an encrypted password from another row into the password field of the bad rows so they can be decrypted. It doesn't really matter what the password is since its not used in authenticating with windows live.
Sorry for the inconvience and thanks for the bug report.
Best,
Joe