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You should be able to go to www.windowslive.com and use the "Forgot Password" option to recover the password for your Windows Live account. Then, you can just recover your profile using the new password.
the solution to these issue is to recover your gamertag or your gamer profile,please follow these steps:
1.make sure no profile is currently sign in (profile means gamertag or gamer profile) 2.press the guide button,this is the silver button which can be locate at the middle of the controller 3.select the option recover gamer tag 4.please enter your gamer tag 5.please enter your email and password once it starts downloading,kindly wait until it is done,it will automatically sign you in your passcode will be reset.
The problem you are facing is due to a corrupt profile, do not delete your current profile, just create a new gamer tag profile on the same xbox 360 and download the media update from Xbox Live, you would be able to play DivX movies again offline.
Before you create the new gamer tag, delete the old instance of media update downloaded earlier to play DivX movies
I faced similar problem, it got resolved after creating a new gamer tag.