This error appears when there is an error in the internet minecraft servers that help verify logins, show skins, etc. Here is a nice website that shows you if they are down...if you get a 'failed to log in' error, just hit up this website and if any of the services are down, just wait for a bit and they will be back up momentarily. Yesterday the Login service was down for a few hours.

http://xpaw.ru/mcstatus/

Do you have a pirated minecraft?