Microsoft is investigating the cause of Xbox LIVE going down for over an hour.
Xbox LIVE issues were confirmed by the XBL status page, which states: "users may experience difficulties signing into Xbox LIVE from an Xbox console", in addition to signing into Xbox LIVE from Xbox.com.
We are aware of the problem and are working to resolve the issue. We apologize for any inconvenience this may cause and thank you for your patience.
The disconnection errors and users unable to sign into Xbox LIVE doesn't seem to be revolving in just the United States; complaints from other regions have been bombarding the Twitter account for XBL support.