As announced in the Seattle Times at E3 2011, XBox Live will be embedded inside Windows 8. Microsoft's goal will be to boost the entertainment appeal of their OS and make XBox the central channel through which consumers buy media -- games, movies and music.
Currently, Xbox Live only runs on the Xbox 360 console and Microsoft's Windows Phone 7 devices. This will change in the future, whereby users can consume media through XBox Live across a variety of devices.
The company feels that XBox Live has been successful on it's mobile platform. Certainly, Microsoft needs a win in the entertainment front--as Apple has a central hub for media--iTunes.