I originally upgraded to Xcode 7.1.1 without incident, but since the iTunes Connect portal upgrade yesterday (November 12th) I encountered problems doing TestFlight archives. I further encountered problems logging into Application Loader 3.1.
This was working fine the afternoon of November 12th, before the iTunes Connect upgrade. Looks like Apple has enabled some additional security.
After some investigation the problem was, in my situation, that if you had your AppleID setup for two factor authentication, Apple is now requiring an app specific password to be used with Xcode and Application Loader since this new iTunes Connect upgrade. Neither tool will take your regular AppleID password on the account under preferences anymore.
The information on how to add such passwords onto your AppleID account is at this Apple support link Setup application specific passwords for an AppleID
Once I used the app-specific password instead of my AppleID password, Xcode 7.1.1 and Application Loader 3.1 was happy and completed my archive validation and export and submission for TestFlight as usual.