Okay, take this with a healthy helping of salt, since it hasn't been confirmed independently or by anyone at either Bungie or Microsoft... but Rampancy.net reader Der Teufel is reporting that Bungie's own Matt Soell told him Halo's multiplayer on the Xbox will be LAN or split-screen only, at least at first:

When I asked Matt about online multiplayer, he said that XBox will have broadband multiplayer online games, but because MS is running behind schedule nailing that feature down, so Halo will NOT have multiplayer online support, only LAN. The XBox has the ability to connect up to 4 boxes with ethernet cable, 4 controllers per box for a maximum of 16 players in a multiplayer game.It's really just another FPS with really pretty graphics. However, I'm sure Bungie is doing a bang up job on the single player story line and it will be very compelling.

First Oni losing internet play, then LAN play... let's hope this isn't becoming a trend. We're attempting to get a positive confirmation of this report now.