While Xbox Live was shutdown for the original Xbox in April 2010, you can still play over the Internet using a free Xbox Live recreation — Insignia. Alternatively, there is XLink Kai or XBSlink on any game that supports System Link, and XLAN on most.
Insignia is a reverse engineered recreation of Xbox Live for the original Xbox. To connect to Insignia, you will need to use their Setup Assistant tool to register your console to their servers.
Below are full registration and setup tutorials by MrMario2011.
An original Xbox (the service does not work on Xbox 360 or later consoles)
If you have a stock Xbox: an Xbox to USB Adapter and a compatible USB device(any data on the device will be erased)
If you have a softmodded console and are not on Rocky5's softmod 1.1.9 or newer, you will need to upgrade it using Rocky5's extras disc, Rocky5's Quick Upgrade or Quick Update. Some older softmods may block Xbox Live or have other incompatibilities.
If you are running a hardmodded console, you need to have a BIOS that doesn't block Xbox Live. Several other BIOSes are supported. Some of these BIOSes include, but are not limited to Cerbios 2.1.0 and newer, EvoX M8+, and iND-BiOS 5003 (XBL Enabled patch).
If your HDD Key is nulled (all 0s), it needs to be changed, either back to the original HDD Key if you still have it backed up, or to all 1s. Only change it before registering your console to Insignia otherwise you may not be able to connect. Do note that there are some game saves that are signed with your console's HDD Key, so you may need to resign them with the new key. Any DLC/Title Updates on the console will also need to be resigned with this tool or redownloaded from Insignia (where available).
Installation
Stock Console
Any data on the USB device you use will be erased. Backup any data before connecting to your Xbox.
Connect the USB to your Xbox and go to the Memory menu in the dashboard. A message should show up saying that the Memory Unit has been erased.
Connect the USB to your computer. If prompted by Windows to format it, click Cancel. Install FATXplorer if not installed. Load FATXplorer, and install the driver.
Mount the USB using FATXplorer by selecting Devices, then click Refresh. The USB will appear as "Original Xbox MU". Select it, then choose Mount Device > Load Device, choose a drive letter to mount the USB to, then click on Mount Data Partition.
Copy the extracted files from Stock.zip to your USB. Once copied, you can unmount it from FATXplorer by selecting Devices > Original Xbox MU > Unmount.
Connect the USB to your Xbox. Select the Memory Unit in the Memory menu. The Setup Assistant will then load.
Select "Register Xbox" and it should pop up a message that it was successful. Select "View HDD Key" and take note of the key.
Select "Quit Setup Assistant".
Launch the Microsoft Dashboard and navigate to Settings > Network Settings, and choose Connect. All four connection status lights should light up green, indicating a proper connection to Insignia.
If you run into issues, launch the Insignia Setup Assistant again and click the "Troubleshoot" button.
Modded Console
On your dashboard, set your Network settings to a Static IP address and add your network's subnet mask and gateway.
Subnet mask and gateway can be obtained on a Windows PC by pressing Start, searching for "command prompt", and running the command ipconfig.
Set the first DNS server to 46.101.64.175 and second DNS server to any valid DNS server such as 1.1.1.1 or 8.8.8.8.
Set the first DNS server in your homebrew dashboards and network enabled applications to 46.101.64.175 and second DNS server to any valid DNS server such as 1.1.1.1 or 8.8.8.8.
Use Xbox:FTP to transfer the default.xbe file to your Xbox and copy it to E:\Apps\Insignia Setup\
Restart your Xbox (or refresh the dashboard) and the application should show up in your dashboard. Launch it.
Select "Register Xbox" and it should pop up a message that it was successful.
Select "Quit Setup Assistant".
Launch the Microsoft Dashboard and navigate to Settings > Network Settings, and choose Connect. All four connection status lights should light up green, indicating a proper connection to Insignia.
If you run into issues, launch the Insignia Setup Assistant again and click the "Troubleshoot" button.
Registration
Visit the Insignia website and sign up using your email address. You will receive an email containing a single-use code.
On the Microsoft Dashboard, select the Xbox Live tab > New Account, and follow the prompts to create an account. If your country is not listed, choose the geographically closest country.
When prompted for a "Subscription Code", enter the single-use code that was sent in your email.
When prompted for a credit card number, use the fake information below:
Payment Method: Visa
Cardholder Name: (any name)
Credit Card Number: 4111 1111 1111 1111
Expiration Date: (any future date)
Phone Number: 123-456-7890
Email Address: Use the valid email address you used to sign up for your account.
Choose "No" to the options asking about sharing information.
Choose "Yes" to activate your account, and choose "Done".
Choose your account you just created > Account Management > Account Settings. You will be prompted for the last four digits of a credit card number, which you will retrieve from the Insignia website in the next step.
Log into the Insignia website, click your name in the top-right corner and choose "Dashboard". Click the "Recovery Info" tab > Reveal. Enter the last four numbers into your console and it will open the Account Settings menu.
Change the Voice, Premium Purchases, and Created Content settings to "Enabled". You can now access all features of Insignia.
Troubleshooting
If you're having any connection issues, such as not being able to join or find any game lobbies, many of them can be resolved by port forwarding on your router to open port 3074 (UDP) for Xbox Live. Port forwarding for each router is different, however you can find guides for port forwarding at portforward.com.
"Your serial number is already taken" message when registering in Setup Assistant
This message appears when your Xbox has already been registered for Insignia. If you can't connect to Insignia and know that the console has not been registered, join the Discord server and go to the support forum.
"Failed to configure TLS" error in Setup Assistant
Your Insignia Setup Assistant is likely outdated. Download the latest one from the GitHub. If you get this error on the latest version of the Setup Assistant, verify your console's date and time settings
"Missing String" in Microsoft Dashboard billing region
Your dashboard is outdated. The latest 5960 dashboard needs to be installed. If your console is stock, you can update to 5960 using any of the games from this list.
Controller not working in Setup Assistant
The Setup Assistant doesn't support some 3rd party controllers. Use an official Xbox controller if you have one.
"Unable to continue" message or taken back to dashboard when downloading an update
If you get this message or are taken back to your dashboard when updating, your game is likely patched or is missing required files. Make sure you're using a clean copy of the game. If you copied your game with DVD2Xbox, turn off ACL Patching in the settings and recopy it. You can also use an original game disc to update.
System Link Tunneling
Several options are available; XLink Kai is account based, uses a central server, is the most popular, allows adding friends, has chat messaging, and uses a mix of peer-to-peer (P2P) traffic and centralized servers to ensure stable connectivity and as low of latency as possible. XBSlink on the other hand is only peer-to-peer, and therefore does not rely on a server being up, and is open source. XLAN only supports client - server netcode games, but allows ping restrictions on rooms, is very stable, and has the unique feature of being able to simulate the same latency to the host for all clients.