First of all if you have broadband and a Xbox YES Xbox Live is something you have to get eventually. I just finally got mine working and it is like it opened up a new deminsion of gaming for me.
Sure, I game online on the PC but this is different in many ways. Becuase you are playing with other people and talking to them, forming alliances, etc gameplay can actually be affected.
This is most apparent in Phantasy Star Online Episode I&II were you can trade, do quest together, etc, etc. If you are an RPG fan I would DEFINATELY recommend getting this game and Xbox Live. THe only catch is after 2 months of having PSO you have to pay $9 a month to keep playing, but if your addicted to it like its crack (like I am) a measly $9 is worth it.
If you want to buy it though I suggest you do it NOW because in a few weeks the current Xbox Live starter kit will go off the market and a new one which cost $70, as opposed to $50 will be coming out. Why the $20 increase? It comes with a full, Mech Assault game which is one of the better games on LIVE and also the $50 for the first LIVE starter was a limited time thing trying to get plenty of members on.
Besides the many LIVE games right now there are a lot of great ones to look forward to like Dead or ALive Online, True Fantasy Live Online, Halo 2, Project GOtham Racing 2, Unreal 2, and Doom3 & Half-Life 2 LIVE play possibly.
Hell there is even more reasons to get it but I don't want to bore you