This is additional info from the Xbox Live Forums
Undertow free of charge next week
To follow up on the letter from Notwen
earlier this month, we now have details on the Arcade title that will be available to download free of charge.
You can read full details here
Edit: The game will be free for Gold and Silver members.
Major Nelson has commented on his site:
"
If you have already purchased the game, you can contact support and they will take care of you."
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FAQ’s
What department do I call into about the refund?
When speaking to MAX, ask for customer support, then Xbox 360, then Xbox LIVE; this is the department you want to speak with.
What is the download, who is it for and what is it for?
The download is for the popular game Undertow, it is a thank you gift for users remaining loyal over the holiday season, this download is for all members Gold and Silver located Worldwide.
What if I already paid for the game?
If I paid for Undertow previously, I am able to contact customer support, provide some information to verify my account and be refunded the 800 points I used to download the game.
I don’t want the game; can I get Microsoft Points or Additional Xbox LIVE Gold instead?
Short answer - No
What happens if they downloaded the game for free previously?
If I downloaded the game for free previously then there is nothing to refund, support staff doesn’t have the ability to give points only refund them and they are only allowed to refund points used to download Undertow. Perhaps something will be made available to me in the future, but as of right now nothing can be done.
The game is only set for download from Wednesday, 23 through Sunday, 27 what happens if my Xbox 360 console is in for repair?
If my console is in for repair, I can call the support line, the will be able to see that my console is currently in for repair and will be able to compensate me.
{Update – Lucky 13 X} Actually, customers should call us as instructed, but please do not expect to be given points if your console is in for repair that can then be used to purchase Undertow when a person is next able to access Xbox Live on their console. We have a way of accommodating you.
What happens if I am still having issues connecting and cannot download the game via LIVE?
This one a little trickier, with this one I needed to call into support and tell them my issue, they try and get me connected to live if they cannot get me connected I will be escalated to a higher level of support who will make the decision on what to do. So for this one it’s a person to person result if they can get me reconnected to live then I will be able to download the game.
{Update – Lucky 13 X}The same thing applies for those who cannot download the game due to Xbox LIVE connection issues. We have a way of resolving the issue after attempts to get connected fails that does not involve giving MS Point refunds.
Please be aware that this information is NOT OFFICAL, and if you call in and get a different answer they may have changed their policies or have been given different information since when I called in. This is just my own personal experience from speaking with support staff.