There exists on Xbox Live, a man by the name of Stephen Toulouse (GT: Stepto). He and his team are responsible for actively policing the service, making sure that everyone who has Xbox Live is abiding by the rules and the terms of service... they help to keep the service fair and safe for everyone and for the most part they do a stellar job of it - however if you've ever been on the wrong side of him you will have definitely known about it... he is also responsible for console bannings, gamerscore resets and any other punishment dished out to those who persist in breaking the rules.
Recently though it seems his personal website (Stepto.com) has been compromised along with his Xbox Live Gamer Profile (which now seems to be back under his control) by a disgruntled gamer who claims to have been Console Banned 35 times... and when you consider that he has managed to jack not only the Banhammer Boss of Xbox Live's website, but his profile too - one can only imagine why he's been banned 35 times. I wonder...
There has also been a http://www.youtube.com/v/ryfZv_qq7Uk uploaded by the person responsible for this which shows him having control over Stephens account.
So what does this mean for us regular Xbox Gamers?
Well I wouldn't go as far as to say this is an epidemic we should all be afraid of but it does raise alarms. 99% of Xbox Live gamers need not worry however there are ways you can combat things like this in the unlikely event of it happening to you.
This article will give you tips to keep your password secure: microsoft.com/security/onlin...
But like I said, it is very unlikely that you will get hacked - Stephen was targeted due to him being a public figure and because people were upset about feeling the long arm of the law.