Terrorists Invade Xbox Live? Federal wiretaps for XBox Live? If the proposal the FBI has made to the FCC is approved, Xbox Live, MSN Messenger, and any other online chatting services would be legally required to have built-in back doors to allow easy access 'wiretapping' of IP communications.

If you don't realize why this is bad, I probably can't convey it to you in just a few sentences. If you do realize why this is bad, but haven't donated to the EFF lately, let me provide this handy link.

While the XBox Live focus is mostly a creation of the gaming media (the proposal would affect all online communication equally), it will be interesting to see how the gaming community responds.
Read - Gamers.com [via DesignTechnica]
Read - Electronic Frontier Foundation