Meh, it really depends. I mostly play games that don't require me to listen to internet retards (burnout paradise, for example) or I end up playing with people I know, limiting the annoying nature of the internet. Every once in a while its pretty bad. Oh well, that's why God created the mute button.
As for xbl, while it's been wonky recently (due to 10 million people downloading updates), I really like it. the NXE is fine aesthetically, though I was fine with the blades, tbh, the mii ripoffs are fun, so the fact that nintendo also did it doesn't bother me a bit. PSN has grown a bit so that it's a serious competitor, but I really don't feel like I'm getting screwed out of my money for $50/yr. I never have any serious connection problems, media is integrated very well and now my netflix is able to be streamed via my 360 in HD very well. Except sony is being a little bitch about it and won't let their movies go through the xbox. Ugh. Oh well, that's what laptops and DVI cords are for.
~Jason