I never use my headset on XBL. Frankly, I have enough on my mind just trying to get my meaty hands to manipulate the controls properly let alone attempting to carry on any semblance of a conversation. And then the handful of times that I did use it I plain hated the experience. At best I had to listen to kids while they were talking smack [alert: 9 minutes of profanity-laced posturing]or just humming to themselves.
And at worse... well check out some of the links to listen to more examples of what has me leaving my headset in the box. I couldn't make it more than a couple of minutes into them and I already feel stupider.
Arguing Over Halo 2 Game
"You couldn't even get laid laughing like that, stupid bitch."
My Drunk Ass on Xbox Live
"I can't remember where you live but I'll kick your ass."
Crazy Guy on Xbox Live
"I don't need fucking Ritalin, Ass Monkey!"
I haven't even tried the camera. I just have too many itchy places that I like to scratch when I'm alone.