Following the news that UK gamers need to pre-order a copy the Xbox 360 version of Call of Duty 4 from retailers GAME to participate in the multiplayer beta test, apparently thousands of people jumped online to take advantage of an exploit enabling players to swop accounts and download the beta onto a different machine.

Xbox-Scene claim they have been sent an internal Microsoft memo claiming that the exploit has now been fixed, but those who tried to download the beta will have their accounts frozen for 24 hours. (This is currently unconfirmed by Microsoft).

The memo reads:

There was an exploit (it's been resolved), in the Call of Duty 4 beta. The public beta had 100k valid participants who qualified and were provided special tokens which allowed them to download the COD4 beta from Marketplace. There was an exploit that enabled valid beta participants to sign in with their accounts on a different machine, use their beta token and download the beta. The beta was then fully functional for any LIVE profile on that 2 nd machine (even after the beta participant's account was removed). Approximately 23k consoles were used to take advantage of this exploit to illegitimately access the COD4 beta.

The current POR is to issue a 24-hour console lockout that will prevent these 23k users from using their consoles to sign in to LIVE. These users will also receive a message in the dash with an explanation as to why their console has been locked out for 24 hours for violating the LIVE TOU and a warning that more severe actions may be taken if they attempt a similar action in the future (console could be banned permanently, etc.). Again, this is not a permanent console ban - It's more of a "slap on the wrist" and a warning to these 23k users who used this exploit.

Source :: Xbox Scene

We know a couple of people who used this exploit and they can still currently access Xbox live