Microsoft anounced that "App Hub has stopped accepting for peer review and playtest any game or game update that was made with XNA Game Studio 3.1. Developers creating games for Xbox LIVE Indie Games must now work exclusively with XNA Game Studio 4.0 if they wish to submit their game or game update to App Hub."
If you've an XNA GS 3.0 or 3.1 game currently on Xbox LIVE Indie Games, it'll continue to work. This change doesn't affect the ability to purchase or play any game currently on Xbox LIVE Indie Games. However, this restriction does affect any updates to existing games in Xbox LIVE Marketplace. A developer who wants to make updates to an existing game on Xbox LIVE Indie Games must make the updates in XNA GS 4.0, even if the existing game was made in XNA GS 3.1 or earlier.
Developers can still deploy and debug XNA GS 3.1 games on their Xbox 360 console by using XNA GS Connect, but won't be able to submit these games for playtest or peer review until they are upgraded to XNA GS 4.0.