Can I use an

For security purposes, you have to have billing information (address) on file in order to use any form of payment.

there is no real way to check to see if a tag is taken all you can do is try to change your name to it if it is taken you will not be able to choose it. also to note that the system does not notice the difference between caps/no caps and spaces/no spaces,
for example and Dave McFly 85 are all considered the same tag.

Hey there Alex,

Sorry to hear you are running into this problem. If you have not already contacted them, I would suggest reaching out to them as it is stating that the code was not activated. This would be the easiest way to get this resolved. Of course if you have already
contacted them and were unable to get it resolved, go ahead and
Contact Xbox Customer Support for further assistance.

I hope this helps.

If you use a VPN for security purposes it's alright. If you used the VPN to bypass region restrictions, then you can get banned.

This is correct sir.

Skype has not been announced as of yet. Although rumours are that it could be intergrated into the xbox 360 although it is most likely going to be included into the next gen xbox instead.