Just get the kit, it's like 70 bucks for headphones, a free game, and a years subscription. Your ethernet cable going to the xbox should just be the same kind going to your computer for your internet. It will have to come from a router of some sort unless you get a wireless one.
Heh, I actually use wireless for my internet. I think I have to get a wireless router for it? Do you have to use a computer to use XBox Live (These are probably the dumbest questions, but whatever)?