Same thing happened to me, my experience;
1 - MS locks down your account for about a month. You can play "offline", but at the end of the process you have to recover the account, which eliminates the achievements you gained in that month. (if you don't care about achievements, no big deal to you)
2 - you're given a temporary profile w/ gold access, but you can't transfer save files from one account to another. That really makes this account useless for any game with progression.
In my case, and many others according to the MS forums, my Windows Live account was still blocked after XBL restored access. WL is the backend of the account, and it's what you put promo codes, MS point codes, account changes into. (when you sign onto xbox.com, you sign onto Windows Live)
The only thing I could do was play against others online with WL being blocked. I couldn't redeem any codes, make purchases, change any settings. It was a huge pain in the ass to get my WL account unblocked, I had to go through numerous departments. Eventually you have to put up with a forum, no live support available. I posted 10 times before getting a response, and the responses were the usual "Recover your account, change your password" (which didn't work, my WL account was still temp blocked)
It took weeks of nagging on those forums to get my WL account unblocked. If I wasn't a tech savvy person (I am IT), I don't think a normal consumer could go through all that.
Total process = about 2 months. 1 month no access, 1 month just getting my account actually working.
My opinion? Unless you're really strapped for money, suck it up. Make sure you change all your acount information on Xbox.com, including security question. The $50 in MS points I got back was nothing compared to the BS I had to go through.