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To set up the "live" on the 360 you either need to:
1. Buy The Wireless Add-On If U Have A Wireless Router and Then You Can Have Your 360 Anywhere In Your House and Play Xbox Live Or...
2. Use The Really Long Ethernet Wire That Comes In The Bottom Of The 360 Box and Plug That Into Your Broadband Router and The Back Of Your 360
And Then You Need To Get A Xbox Live Subscription If You want To Do more Than Download Trailers and Game Add-Ons.....Some Games Come With A 2 Month Trial In The Game Box, Just Scratch Off The Code and Type It Into The Xbox Screen When Prompted.
oh by the way, whats the differeance between a xbox arcade?? and a normal xbox because the arcade is alot cheaper but i dnt have a clue whats its all about if u no what i mean
you have to set up a Xbox Live Silver Account and they automatically upgrade your Silver membership to gold for one free month,then upgrade to Gold after your months free trial