Does it?

Besides playing online for free, and also being able to have friends, there are no other real benifits of having it. Xbox Live charges you to play online but also offers downloads, updates, and mappacks but again you have to pay for some of those things. I choose Xlink Kai over XBL because I really dont care about mappacks and updates I just want to play online. And no you do not need a modded xbox to use xlink kai.

the biggest benefits are its free and you can use a modded xbox.

I actively played Halo 2 on it until April of this year. With the release of Halo 3 most players have moved on to Xbox Live and so did I. In the end none of my friends were still around and playing with some noobs that I did not know wasn't that funny anymore. However, there are still some players around, most of them playing Halo 2. XLink was a really cool thing but now everyone seems to play PSP.

Anyway, from time to time I still get back to XLink and play some games, although it's not half of the fun than it was some years ago when all my friends and even the XLink admins themselves were playing. I will never forget those days.