As reported Microsoft had servere issues with availability of the Xbox Live service over the Holiday. Despite having apologized and offering a free Arcade game, still some users are going ahead with a class action law suit against Microsoft.
The suit, filed in U.S. District Court in Houston, claims that the Xbox Live outages represent a breach of contract and negligent misrepresentation. Apparently the claim is above $5m.
Via CNET.

Today's message on the Xbox Live services info on the xbox.com site is: "Xbox Live and Zune Marketplace users will experience billing related transaction failures, including but not limited to: Purchase of premium download content, music, and account management, including account creation, renewal, and recovery; additionally users may experience issues with matchmaking and statistics related transactions." Happy weekend, Microsoft engineers!