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My live account is/was a hotmail account. But i started another just to see if that was the issue. I installed it via Steam, but to save, etc. you need GFWL (don't get that, but whatever). Whenever I try to log in, it says something about country/region code.motionjoy - ds3tool + PS3 Controller was easier to get working with Dirt3 than installing Dirt3 with GFWL for me. sorry don't have any tips, other than to verify your live account works with hotmail etc..
http://support.xbox.com/en-US/pc
http://support.microsoft.com/kb/937066