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You use a headset when you have a bunch of friends in the same halo match for example...you make a private chat tho, you don't talk like a retard to everyone like most kids do. I sometimes start team killing if the person won't shut up...

Otherwise xbox live is great if you want to talk some trash to people and if you want to annoy them... When I play guitar hero 3 and I hear the other guy has his headset on, I sing while I play guitar... how annoying is that? :)