Once you have patched GTA-IV, if you also have EFLC, it will automatically patch that too. For example, I have a decade-old GFWL account and the server allowed me to login without any issues, but a lot of people have found that their GFWL login no longer works, so make a new XBOX one. (3) When prompted for a login, you can choose to ignore or to create a new XBOX account. (2) Install - this patches the games so that the old Games For Windows Live (GFWL) login is upgraded so it now connects to the XBOX server which replaced it. This really only applies if the existing installation has become corrupted, been modified or seemingly won't work.
(1) Do a fresh install of GTA-IV or ELFC (or both) unless you already have a fresh installation. Your problems are a direct consequence of using gfwlivesetup.exe anyway, you won't need to do step (1) in the list I'm providing, but you will definitely need to do step (2) onwards. Firstly, DON'T PANIC - this happens to everyone! Its a consequence of a recent fix to the game that somehow nobody at STEAM bothered to tell anyone about.