Major Nelson has blogged that they’re ”actively working” on the solution where Live ID’s that go dormant could lead to deleted Gamertags.
The way to prevent a Windows Live ID from going dormant is to log in with it every once in a while. Astoundingly Microsoft doesn’t count signing into Xbox Live as proof the ID is active.
”In the rare case that you DO NOT sign in to Xbox.com or another website that uses Windows LIVE ID (like Hotmail) it is possible that your Windows LIVE ID expires (goes dormant.)” blogs the Major.
”An Xbox LIVE Gamertag is unrecoverable from the system only when the associated Windows Live ID has become dormant and the Gamertag has been deleted from all Xbox 360 consoles.”
”We recommend that people log into their Windows Live ID on Xbox.com or Xbox LIVE Marketplace on the Web at least once every four months,” he continues.
”We are actively working on an update that will allow you to link your Gamertag to a new Windows Live ID if one becomes dormant.” I use the same Windows Live ID for both Live Messenger and my Xbox Live account which seems the best tactic to avoid Microsoft’s balls-up.
Source: VG247