Xbox Live has 2 levels: Silver and Gold. Silver is free, and you have complete access to the Marketplace, where you can download demos and updates to games you own, as well as purchase skins, gamertags, and edit your profile. Gold allows you to play others online. So if you wanted to play against your buddy in Halo 3, you'd need Gold level. Still, it's ridiculous to have to pay extra to play a game you already paid for.