never played with xbox live, rather play games via computer than console. Although i forgot who rls'd it but i saw on cnn that a company made a pc gaming console that you dont touch the windows stuff, just put the game in and it plays or something looked really nice.
If you already have an xbox try to get new x-ecuters, they are nice, pogo pins make it so you don't have to solder anything, and with the turn off function as said abobe for the xbox live its even better. If you want a larger hard drive to send the media files make sure that it is lockable (for online play). before tv out i only used xbox media player, its a decent little tool. last thing, I had to add a second dvdrom because the phillips drive i had in it wouldn't read the dvd-r media, so you might have to tinker around with some of the stuff. also if its modded it should play different regions i think just look at the chip spec's.