We mentioned in the release announcement that Adium 1.0 supports custom emoticons. We've had some people on the forums and on the IRC channel (among other places) questioning this, saying that “when my buddies send me an emoticon i don't see anything.I only see the text...”.

In order to receive custom emoticons, you must turn them on. This is in the Preferences, on the Advanced pane, in the MSN section. This checkbox is supposed to be turned on by default, but there's a bug in the code that looks for the default settings (which I've filed as #6212).