Instructions
Make sure you Xbox 360 is connected to a broadband Internet connection. If you have a wireless connection in your home, you will need the wireless adapter that connects to the back of the console.
Go to the Xbox 360 Dashboard and select "My Xbox." Then select "Sign-In" and "Create Profile". Follow the prompts to create your account.
Select your profile under "My Xbox" and then select "Join Xbox Live."
Peel off the back of your Xbox Live starter card to reveal your subscription code. This 25-digit code is a mix of numbers and letter and must be entered precisely to work properly.
Follow the instructions on the screen to redeem your code. Your account should now be activated for 48 hours.