I wouldn't panic at all, there is a logical explination.
Did you recently install MSN messenger? Look at the last few steps of the traceroute:
10 ten8-3.sjc-76cb-1a.ntwk.msn.net (207.46.34.181) 170.591 ms 170.536 ms 170.539 ms
11 pos4-1.tuk-76cb-1a.ntwk.msn.net (207.46.34.162) 187.927 ms 188.079 ms 187.972 ms
12 ten2-1.tuk-76c-1b.ntwk.msn.net (207.46.36.201) 191.817 ms 187.728 ms 187.879 ms
13 gig4-14.tuk-6nf-5b.ntwk.msn.net (207.46.39.110) 188.174 ms 187.926 ms 188.996 ms
14 65.54.195.185 (65.54.195.185) 187.719 ms 187.855 ms 187.904 ms

That is why the traceroute would return a renton address, as the servers might be hosted in renton (renton is quite close to redmond, I used to live right next to both in Kent)

When MSN tries to connect, your firewall sends up a warning message (if any of you have Norton's 2005 firewall and AIM might know what I'm talking about). Anyways, I wouldn't worry too much as the pathway is legit.