Wowzers.
I thought it was all a misunderstanding, based around the idea that a one-time activation would be needed. But a connection to start each time, and constant connection to keep running? Hmm.
I mean, it's not a HUGE deal for me, except for the odd time my net goes down...I guess. But wasn't there some crazy statistic about how around a third of 360s weren't net connected?
I suppose MS wants to force all consoles online, since an online console is a more valuable one (in terms of content sales, ads etc.)
If true this also suggests there will indeed be sort of more universal caveats around game sharing and second hand games.