Fable and Lost Chapters are a bit of an oddity. They're not marked on the front as Live Online Enabled but on the back of the box, as said, as being Live Aware whatever that means. Whether they'll update the dash just try it and see - if it does you'll get a very clear message and the short update process will be very obvious.
There are plenty of Live Enabled games easily found if it doesn't work and they cost peanuts - in he UK places like CEX do them at as low as as 50p ( US 75c). Maybe a good excuse to pick up a few decent games whilst you're at it eg. Ninja Gaiden Black, all the Splinter Cell games (bar the original), Chronicles Of Riddick, Star Wars Knights of the Old Republic, Timesplitters Future Perfect, Hitman Blood Money, XIII. I've just looked at these from my own collection and they're all marked as Live Online Enabled.
If you're desperate to use SID the last and far more up to date version (5.11) than the old one you have is easily found. In fact it is almost impossible not to find it if you use the most obvious search term.

But judging from what you've said I'd definitely stick with
Heimdall's advice about using Krayzie 1.1.1.
As for networking your Xbox with your PC or whatever you want to do there are tutorials here but this post and thread might be useful if you just adapt the info for Vista:-
http://forums.xbox-s...&...t&p=4825313