Xbox Live is currently having a downtime worst case scenario. It, horrifically, is having issues related to billing, meaning Xbox Live Marketplace purchases are wonky and signing in to Live accounts is shaky. The horror...
Larry "Major Nelson" Hryb has official status on the well-being of Live, writing on his blog that "Xbox LIVE members may experience issues related to billing." That means you're not the only one with difficulties with account recovery, account management, Xbox Live Marketplace functions and making purchases.
This doesn't affect matchmaking, friends lists and Live messaging; just the nightmare of not being able to turn cash into precious Microsoft Points. We wish the billing functions a full and speedy recovery.
Xbox LIVE Billing Issues [Xbox Live's Major Nelson]