But it's a mess Microsoft are looking into, with Xbox Live Police Chief Stephen Toulouse saying:
Expression of any sexual orientation (straight or gay or otherswise (sic)) is not allowed in gamertags.
However we've heard from the user base they want that capability, so I am examining how we can provide it in a way that wont get misused.
I can't say any more at the moment, except to say I'm working right now in finding a way to safely express relationship preference.
Better late than never, huh?