[quote name='Matt Young']People... I have been using SBC Yahoo DSL for 3 months now and my Live experience has been great. It may vary depending on your ISP, but satellite based internet definitely works for Live.[/QUOTE]
DSL is completely different from satellite internet. DSL runs over phone lines, using a different frequency from voice communication to avoid interfering with phone conversation.
http://computer.howstuffworks.com/dsl.htm
Satellite internet, as its name suggests, uses a satellite dish to transmit and receive data to and from a satellite orbiting the earth. The data is sent from the satellite to a ground-based hub, which connects the signal to the ISP's servers, and then, the Internet.
http://computer.howstuffworks.com/question606.htm
[quote name='delahappy']doesn't satellite download throught the dish but upload throught the phone line? If so, no it wouldn't be very good for xbl.[/quote]
At first it did, but newer dishes both transmit and receive through the dish, which vastly improves upload throughput.
I used satellite internet for a few years before we got DSL at my parents' house. We started off on the receiver-only satellite dish (uplink through phone line), then switched to the dish that transmits and receives.
Satellite internet is very fast in terms of throughput, but the latency is very high. Consider this: when you enter a web page address in your browser, your computer sends a request out to the internet to retrieve the web page. The request eventually makes its way to server for that web page, and the request tells the web server the IP address of your computer so it will know where to send the data. The web server then transmits the data to your computer. Latency is the wait period from the time you send the request to the time the data first arrives at your computer. The throughput (a.k.a. bandwidth) is how much data can be transferred to your computer simultaneously. The reason that the latency is high is that for satellite internet, the web page request you send out has to be beamed up to the satellite, sent down to the hub from the satellite, sent to the web page server from the ISP's servers, and then backtrack back to your computer. The distance covered by the signal going up in the sky to the satellite and back down to the ground is very high, hence the large latency, or delay.
That said, because of the high latency, I would not recommend satellite internet for gaming. It would be very laggy. DSL would be fine, cable would be better, but satellite has too high a latency.