"We understand these technical issues have resulted in a very unpleasant experience for our members, including extremely slow downloads or not receiving the content they purchased. We've made progress over the past 24–hours, and the team is dedicated to fixing the issues and continues to work as fast as they can around the clock to get the service running as seamlessly as you have come to expect."
Downloading will hopefully be stabilized within a few days, but has the damage been done? Will this sloppy roll-out affect Xbox Live's credibility? Perhaps. But as long as Sony and Nintendo remain behind, Microsoft is free to take risks with its online service. Like it or not, Xbox 360 still has the advantage.