Despite getting the service up and running yesterday, Xbox Live is still having issues when attempting to recovery a gamertag (Confirmed by Major Nelson
). After entering in all needed info (tag, e-mail, password) it kicks you out with the message that "Live is unavailable to accept sign-up) and fails to compete the recovery. I know this because I am in limbo with a Gamertag that won't recover to my premium unit.
Update (Chuck): It seems like Xbox Live is still experiencing service wide problems, not just with recovery.