Yes you do need dsl or cable. Also, you cannot use dialup because xbox only has rj-45 jack in the back which is used only for dsl or cable. I've got SBC dsl which is pretty good and reasonable monthly fee $26 if you sign a year contract. Here you can find a more info on how to set up xbox live Xbox Live Connect and here is the sbc website SBC

Edit: If you want to get more out of your xbox, I recomend getting a modchip. You can do so much more such as installing media player(watch all the video formats, mp3s, pics, etc), play emus and some much more. Check out this site if you are interested Xbox-scene

WHoa wait. if u mod ur xbox and get online, microsoft will ban ur membership. due to stealing games. like if u use a modchip to save games that u dont really own, then thats when u get ban from xbox live. yes u DO NEED some kind of highspeed internet.

xphoguytonyx Wrote: WHoa wait. if u mod ur xbox and get online, microsoft will ban ur membership.

You can turn most current modchips off so you can go on Live without getting banned while the chip is installed.