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The new update for xbox 360's launch of Kinect is causing problems. I
fixed mine by going into System Settings, Network settings, then
running a test on xbox live. Initiating the test logs your profile out
then runs a network test. The test completed with no problems
and then asked me if I wanted to update again. Without logging back
into my profile I clicked OK and the update ran without a hitch. I
think the solution lies in the fact that my profile was logged out and
from what I have seen, the only way to connect to xbox live without a
profile being logged in is with a network test. Once you connect to
xbox live it senses that you don't have the update and asks you again,
this time without a profile logged in and you are able to do it.
(These instructions are vague because they are from memory, so sorry if they are not very clear)
Go to Console Settings, then go to Network Settings, then click A on the first thing that comes up, continue clicking A until it returns you to network settings. Then try to connect to Xbox Live again, if you still can't connect, then the xbox 360 console is not close enough to your internet source, or you don't have a wireless internet connection.
You can go to www.xbox.com and log into your live account. In there you can add the pre-paid card to your account. There should be a way to do this on the console as well, but am not sure off the top of my head how to do so.
thats the problem one of them is using your live account the same time you are. you can only be logged in once per account. i would change your password on your live account from www.xbox.com and not give out your account information again
the reason u need to log into xbox live is because its not the same xbox360 which you purchased the games on for example the arcade games you purchase online this happens to everyone that has either purchased a new system or got one back from microsoft repair center