My Windows Live account is actually a University of Massachusetts domain, it is also my outlook account and my developer account.
Since the beggining of Windows Phone, my settings account page shows "Attention Required" under my live account. I tap it and it says my live password is incorrect. It has been like that this whole time, across many devices and even through several password changes (my first attempt to reconcile the error was to make a new password).
However, I have no problem getting my messaging notifications from twitter/fb/linkedIn through my live account. (My emails, calendar, and contacts are through my outlook which also uses the same ID and doesnt give me an incorrect password error). I dont have any problem downloading, installing and buying apps, which happens through my live ID as well.
Has this happened to anyone else? Were you able to fix it, if so, how did you fix it?