Before being able to use XSN, you also need to:
- Get a Microsoft .NET Passport. You can get a .NET Passport for free from
www.passport.net (any email address can be given a passport, not just Hotmail addresses). Or if you already have a Hotmail or MSN email address, then that is already also a .NET Passport anyway.
- Link your XBL Gamertag with your .NET Passport. This is done at the XBox website:
http://www.xbox.com/en-gb/live/gamertaglinking.htm
Then, once you have linked your Gamertag to your .NET Passport, you need to go to the link Cas gave,
www.xsnsports.com, & sign up to XSN using your Tag-linked Passport.
And yes, it's all free
EDIT: Also, the main purpose of linking your Tag to a .NET Passport is for using "MyLive": this is a very handy section of the XBox.com website that lets you see your FriendsList on your PC. It is also something that should be getting bigger & better with the launch of XBL 3 hopefully...
http://www.xbox.com/en-gb/live/friendslist.htm