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Its the little things that everyone forgets to recognize with Live that make it the superior service. Here is a good example of one:
My friend had a launch 360, he decided to sell it on Ebay because he wanted to pick up one of the new elites. What he thought, and what I thought as well, was that all his saved games and progress would be lost once he sold his old 360 with the hard drive. When he plugged his Elite in and signed in on his gamertag not only did it recognize his achievement score (which I knew would happen) but it recognized what level, titles, emblems, weapons, etc he had in MW2. No need to transfer anything from his old HD. Everything is linked to your gamertag and Live does an amazing job of doing this. I also know he will be able to redownload all his previously downloaded and paid for arcade games at no cost (since its linked to his gamertag).
Live is definately the better service.