If your password for your LiveID is longer than 8 characters, change it at http://account.live.com and change it back after activation.
You may want to try deleting temporary Internet files and cookies to resolve a LiveID login problem. Even if you don't delete cookies, be sure to close all browser windows before trying to activate from within OneCare.
If you are still unable to activate, review the installation troubleshooting -
http://forums.microsoft.com/WindowsOneCare/ShowPost.aspx?PostID=1588602&SiteID=2
and support via email is an option for you:
How to reach support (FAQ) - http://forums.microsoft.com/WindowsOneCare/ShowPost.aspx?PostID=2421771&SiteID=2
-steve