Windows Live requires a public domain (not localhost) that matches the registered client app's callback URL. You can either host this sample on a public URL and register your own client, or you can modify your "%windows%\system32\drivers\etc\hosts" file to temporarily add this entry:

127.0.0.1 samples.dotnetopenauth.net

Then access this sample via this url: http://samples.dotnetopenauth.net:59722/WindowsLive.aspx