Since I bought an Xbox 360 recently I could finally change my Live ID to use a live.com account and get rid of my Hotmail one (I closed it out, good riddance). Anytime though I would start up a Steam game that had Games for Windows support such as Fallout 3 or Red Faction: Guerilla my login would fail despite entering it correctly. As expected it would work fine anywhere else such as on xbox.com and on my Xbox 360 so what gives?
Finally occurred to me to just delete my profile. In one of the games I mentioned earlier I just started it up and hit the HOME button to bring up the Games for Windows overlay and since you aren't logged in just hit cancel on the login form and you'll be presented with 3 options, the last being "Delete Profiles." From there you can delete your profile and log back in with the same account. No more login failed or login incorrect errors.
Your information and save games are kept intact so don't worry, they don't get deleted. I guess a profile is a local setting or storage on your PC for your account. Hope this helps someone.