The xbox states that we have a connection and when finished with the systems check goes to load an update but fails and then xbox live fails. I am using a cox cable modemn to the dlink 624. works on everything else.

Sounds like something on the Xbox is causing the update to fail. Make sure you have plenty of room left on the hard drive for temporary update files. Also check in the Memory section of the settings if there are any previous downloads which did not complete correctly. If there are, remove them.
I just found this at the teamxbox forums (credit to the original author):
Turn off the system and the controller. Then while everything is off, press and hold the sync button on the controller, then press the power button on the controller to start up the system, continue holding the sync button until the dashboard comes up. If I'm not mistaken, that should delete the failed update, assuming it actually was a failed update. Then just restart everything and do the update again.

Came across a link that might be of some use to you, here's what it says:

Get Updates for Your Xbox 360 Console There are three ways to get updates for your Xbox 360 console:
Update through Xbox LIVE. Copy update to a USB Flash Drive. Burn a DVD or CD. Update through Xbox LIVE
Getting the update free on Xbox LIVE is the best option because your console will be automatically updated as new system software is released.
To update your Xbox 360 console on Xbox LIVE, you must have an Xbox LIVE account with either a Gold or Silver membership, and a broadband Ethernet connection.
To update on Xbox LIVE: Connect your Xbox 360 console to your broadband connection. If your console is not connected already, see Connect to Xbox LIVE. Note Your console will be restarted when you join Xbox LIVE, so be sure to save your game progress. Create an Xbox LIVE membership or add one to your offline profile, if you haven't already. Go to the Marketplace area of the Xbox Dashboard and select Join Xbox LIVE. Follow the steps for creating a profile. You can also add an Xbox LIVE membership to an existing profile by selecting Join LIVE from the Xbox LIVE area of the Xbox Dashboard. You may be asked to update the software on your console. Select Yes and wait for the update to finish. Future updates will be installed automatically, as long as you are signed into Xbox LIVE. Copy the Update to a USB Flash Drive
If you don't have an Xbox LIVE account or have a slow Internet connection, using a USB flash drive is a good option.
Note: The USB flash drive must use the FAT32 file system.
Update using a USB flash drive:
Connect your USB flash drive to a USB port on your computer. Click here to begin downloading the update folder. Save it as "$SystemUpdate9199.zip" anywhere on your computer. Unzip the File. Copy the contents from the unzipped folder onto the root of your flash drive. Safely remove the flash drive from your computer and plug it into a USB port on your Xbox 360 console. If your console is on, turn it off, then back on. The update program will start automatically. Select Yes, update now. When you see the new dashboard, you're done. Burn a DVD or CD
Your other option is to download a file from Xbox.com and burn a DVD or CD. Use this method if you don't have your console connected to broadband, or if you use a dialup connection to the Internet. You could even do this at a friend's house who has a broadband Internet connection and a DVD or CD burner.
To create an update disc you need the following:
A DVD or CD burner. A blank, writeable DVD or CD. The update file from Xbox.com. This procedure involves burning the DVD or CD by using Microsoft Windows DVD or CD burning software. If you're using third-party CD/DVD writing software, follow the instructions for creating a data disc.
The same steps apply whether burning a CD or a DVD.
To create a DVD or CD:
Click here to begin downloading the update folder. Save it as "$SystemUpdate9199.zip" anywhere on your computer. Place a blank disc in your burner. From Windows Explorer, select Open Writable CD Folder Using Windows Explorer or open the CD drive icon. Open (double click) the zipped $SystemUpdate.zip folder and drag the contents of the zipped folder to the root of the CD Folder. If the CD write window doesn't open by default, drag and drop the folder onto the CD/DVD RW drive. Note If you are using an earlier version of Windows you will need to open the file using a separate utility (for example, WinZip). In the Explorer window, click Write files to CD from the CD writing tasks or right-click the CD/DVD RW drive and select Write these files to CD. Caution The update filename and folder structure must be intact for the update to run properly. Follow the steps in the CD wizard. When you are finished with the wizard, the CD will eject. Your CD is ready. To update the console:
Place the CD in the Xbox 360 console.
Power cycle the Xbox 360 console. The update program will start automatically. Select Yes, update now and press A. Wait for the update to complete. When the console reboots, you're done. If this does not work then you need to sand your xbox in to microsoft.
Keep Checking Daily for the new update.

Here's how I fixed mine. When I got the message stating that the download was unsuccessful I went into settings, then network, and I tested my network connection. During a network test it automatically logs your profile out, but when the test came back good, before it logged my profile back in, it asked me to update again. I hit "a" to accept the update and it worked this time.

Try plugging the xbox straight into the modem and not the router, if it still happens, reset your modem and router and try again. Xbox live can be sketchy at times. Also the traffic to xbox live because of the holidays can sometimes screw with the updating and such.

SEND TO MICROSOFT... MANY PEOPLE GET THIS CAUSE THEY DON'T WAIT FOR THE SYSTEM TO LOAD THE UPDATE AND ITS MESSES UP THE SYSTEM FOR GOOD AND YOU THEN WILL NEED MICROSOFT TO FIX IT.

you have to get internet back. And let it finish updating. No way to reverse it.

it will be on as soon as they finish up loading the update to online xbox live. give it till 10 am.

for some reason i cant connect to live, it says that my mtu has failed. any surgesstions how i solve this??

Netopia's Modem my also act as a Router protecting your system from internet traffic! You need to check your model to insure what you have. If it is a Router you will have to Contact Netopia in regards to configuring Pin Hole on the Router to open the gaming ports on the Router.

Coach "J"

Have a great 2008!

I think your account might have been banned, or have you tried to sign into silver with another account? If that works its ur account,