Wireless controller (by 4 users)

I recently purchased an xbox 360 and it came with a wireless controller. I also purchased an accesories pack containing two games and another wireless controller. my problem is i can only get one controller to register at a time. My kids cannot play any two player games at present. should the xbox360 automatically detect the second controller when it is switched on? or is there a certain procedure i need to follow?. When i activate the second controller, the little xbox cymbol flashes and rotates but nothing else happens. I have noticed on the first controller that when it registers the little xbox cymbal flashes then stops on the number 1.Can more than 1 wireless controller be used on the xbox at the same time? and how? thankyou.