Microsoft have announced that from today, they have begun removing "dead" gamertags from Xbox Live, to free up the currently unavailable names.
Gamertags that are defunct, completely unused or unavailable/inaccessible (such as gamertags from the original Xbox's Live service or permanently suspended accounts) will "rise from the dead" so to speak, giving gamers the chance to change their gamertag to one that has been unused for so long. You know, the sort of gamertag that you really wanted to have when you created your account but someone else had already laid claim to, so you ended up adding two arbitrary numbers to the end of yours that you've hated for years...
Major Nelson has said that they will clarify exactly what is meant by a "dead gamertag" on his next podcast
This process will take a unspecified amount of time to complete, but they will be reviving gamertags on a daily basis. Microsoft will not announce or publish the gamertags that have been removed, so if you are interested in seeing if the 'tag you've always wanted becomes free you should check its availability regularly, either by checking the account's page on Xbox.com or via the Change Gamertag function on your Dashboard.
Of course, you will still have to pay the standard 800 MSP fee to change your gamertag if you so wish. If your gamertag was auto-created for you however, you can change it for free, once.