Try creating an account directly on the website
Instead of sign in click register and you should be able to create a new gamertag
I'm not really sure what could of caused the problem, maybe its the information you entered , maybe Xbox Live is not available in your area (i dont know where you're from)
As of december 2010 Xbox Live is available in the following countries:
- Australia: International English
- Austria: German
- Belgium: Dutch, French
- Brazil: Brazilian Portuguese
- Canada: English, French
- Chile: Spanish
- Colombia: Spanish
- Czech Republic: Czech
- Denmark: Danish
- Finland: Finnish
- France: French
- Germany: German
- Greece: Greek
- Hong Kong: Traditional Chinese, English
- Hungary: Hungarian
- India: English
- Ireland: International English
- Italy: Italian
- Japan: Japanese
- Korea: Korean
- Mexico: Spanish
- Netherlands: Dutch
- New Zealand: International English
- Norway: Norwegian
- Poland: Polish
- Portugal: Portuguese
- Russian Federation: Russian
- Singapore: International English
- South Africa: International English
- Spain: Spanish
- Sweden: Swedish
- Switzerland: German, French
- Taiwan: Traditional Chinese
- United Kingdom: International English
- United States: English
If yours is not listed then I am sorry to say you cannot create an Xbox Live account
