According to the Xbox support site:
“We are still hard at work fixing the issue members are having signing in to Xbox LIVE. Rest assured we have every available resource working on fixing the problem. Thank you for your patience and keep checking back here every 30 minutes for an update on our progress”
Microsoft have not released a reason as of yet for why or how these services are down. VGU are trying to find out why now and we will let you know as soon as possible.
[UPDATE] Some users can get online but, as far as we can tell, not that many. Let us know if you can!
Is your Xbox Service effected? Or is it not? Let us know in the comments below!