@aravindpilla per @moonwell on 2 Feb 2009 there is a bug using the API when updating a contact when specifying lists they are already subscribed to. For more information, please read this forum thread (and all replies).
I also ran across a similar problem last night as was able to replicate the issue discussed in the aforementioned thread. In short, you have to do an update e-mail request without any List assignments. Then, after a successful update e-mail request do a second request to re-assign the contact to a list(s).
I hope Contstant Contact resolves this soon because it is a real pain to have to do double calls when updating an e-mail address to preserve contact history.
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