Xbox.ign.com has a rather detailed article about what MS intends to do with Xbox Live.

All Xbox Live games will use voice communication, using a Voice Communicator module that plugs into the top slot on the controller. Your Xbox Live ID will be transportable to different Xboxes via the memory card. The system will track stats, and match players who have equal skills a good connection to you.

Developers will determine just how massively multiplayer their Xbox Live titles will be. The gaming servers are all controlled by Microsoft (and to some degree Sega with their crop of XBL games), so that the game creators simply have to request the bandwidth they'll need to get the desired result. NFL Fever can only support eight players on two Xboxes at the maximum and only when they're going to head to head. That is you in St. Louis can team up with your buddy in San Antonio to take on some schmuck in Santa Fe. If you and your friend want to beat up on Santa Fe, one of you is going to have to hop on a plane because cooperative gameplay in Fever can only be done with 1-4 players on one Xbox and opponent(s) on another. A game like Unreal Championship is going to have an entirely different set of rules and parameters as determined by the nature of online first person shooters.

No more word in the article specifically about Halo, but Xbox Live does sound like a promising service, should it deliver all it promises.