According to Microsoft, the recent spate of hacking attacks hitting the internet has not affected Xbox Live. A user in the company's Xbox forums asked "I have read reports that some Xbox LIVE sign-in info has been compromised by an online group. Is this true?"
Here's the official answer:
"This group appears to have posted a list of thousands of potential email addresses and passwords, and encouraged users to try them across various online sites like Xbox LIVE in the event one of the users happens to use the same password and email address combination. At this time we do not have any evidence Xbox LIVE has been compromised. However we take the security of our service seriously and work on an ongoing basis to improve it against evolving threats."
The group in question, Lulzsec, has released over 62,000 email addresses and passwords from various sources, and, if you use the same password for your Xbox Live account as you do for other things, you might be vulnerable to hacking. The solution, as always, is to change your passwords frequently, and/or grow a long beard, burn your computers and live in the woods.
If you want to check to see if you're on lulzsec's list, here's a searchable database of the information that's been made public.
Source: Xbox Live Forums