If you typed it in correctly, you would be able to sign in just fine.
Make sure that you are using the correct WindowsLive ID associated with your Xbox gamertag. If you know you are using the correct e-mail address, then you are having an issue with the password. Try using the login info on xbox.com and see if you can successfully
sign in. If not, use the 'forgot my password' option to take the necessary steps in order to get it straightened out.