Xbox Live is reliable, but I still think £40 for what most people use it for (playing mates online) is a right royal rip off. thankfully there was an offer on my dash to renew for £23.99. I would have been most peeved at having to pay £40, and would quite happily have grabbed as many 48 hour codes as I could until I was in a situation where I had to renew.
Even the online e-mail ones are about £35 now. Personally I think £25 would be a very fair price to pay, or they need to start introducing tiers of membership, because I really don't give a crap about Zune, facebook, twitter, movies, sky etc on my xbox. I just want to play games.