Not sure if this helps or not, but I figured I would at least contribute here. I have had my xbox since November 2003. It was brand new at the time and I had a xbox-scene member mod it and send it to me. I was never worried about live, so I never used it. Then Halo 2 came out.

I figured I would give it a shot. So I borrowed a friends game and 2 month trial. Signed up for live. Everything is working fine for a week now. I know you guys have a ton of theories, so maybe my info will help. Then again, maybe not. Who knows. I'll be happy to answer any other questions if you have any...