Personally I think Steam should be the primary digital distribution service.
Steam is a simple, clean interface that allows developers to put their product up (even indie devs), and make most of the money from sales (like itunes)
Microsoft's service will inevitably become bloated with gamerpoints, sponsorships, ect.
Also, I'm guessing it's only selling games with the "games for windows" tag attached to it. That's just another hoop that indie game developers have to jump through for no reason. I just don't trust M$ enough to be nice to the small guys and let them compete. I hope steam keeps growing, they have a duty to fulfill!