There are two things to take away from comments by a Microsoft exec that Xbox Live "will be built into the PC". One, Xbox Live on PC, hurray! Maybe they won't bone it like Games for Windows.
Second, remember how Zune's slightly smelly but very pretty corpse was going to live on as the "entertainment brand" for Microsoft, whatever that means? Probably not anymore. "[Live]will be the service where you get your entertainment." While the Zune experience is dandy, the name is like carrying a cannonball in your gut. It's heavy, deadass weight. Better to call it something people like, since it's a product/service people would probably like, if they could get past the name.
And it'll be nice if Microsoft can more neatly and genuinely unite Xbox Live across its infinitude of platforms and devices (parts of this mass, sprawling thing called "Live" do span across multiple products okay, but it very often doesn't feel tidy). Partly because it just should be that way, and partly because iCloud sort of makes Microsoft look ridiculous for not having something as elegant in place before Apple. Apple has always sucked at the internet. Microsoft hasn't been that bad! So it's sort of bananananas.
Anyway, the point is, I'm all for bringing things together. And the full quote, from the Seattle Times for decoding:
Live has been successful on the Windows Phone. Live will be built into the PC. It will be the service where you get your entertainment. We were talking about it - you will not just see consoles and handhelds at this show next year, this show's going to morph into other devices.