For now, Xbox 360 Xtreme backup games work on Xbox live. We don't know when Microsoft will respond on the situation, but most likely they will. Use Xbox Live on your own risk, we don't support using Xbox Live by any means.
People who make a new thread about this subject get a warning or temporary ban! Don't try to waste Moderators time, because it will cost you time.
Use this topic, it keeps the forum clean!