Verified answer

You need to update it, be logged into Xbox Live (a free silver account will work) when you try to play an Xbox game. It will download the update, then if it is supported, it will play the game. If you can't connect to Xbox Live, you can download the update off the Xbox website and burn it to a cd that will update your 360. Check the link below for a list of games that work.

You just need to run an internet connection into the back of the Xbox 360 and insert the game you are trying to play. It will download an update so you can play it.

That's normal, you need to buy or upgrade something in order to play Xbox games.