Phone line? As in dial up? No dice. You need, atleast, a DSL connection or faster to get Xbox live.
You can use a UPnP media server, such as
TVersity to stream music from your laptop to the 360. What's cool about TVersity is that even though the music you want to play is an unsupported format for your Xbox, it will automatically transcode (make it into something the Xbox 360 can play).
If you have a broadband connection (e.g. DSL, Cable, Sat, etc.) you can have Tversity stream your favorite internet radio stream to your Xbox 360.
Download the latest Windows Media Player, Tversity or
These other media servers, install, configure (TVersity is fairly easy to setup), and go look for the Tversity folder in your Music section in the NXE menu.
I wrote a how-to on setting up TVersity
here if you need help setting it up.
Hope this helps,
Bill
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