You have to select the Xbox Live option & then you will be prompted to update your dashboard from the disc.
Halo 2 has the newest version of the file so it should work fine.
In either version, you get firmware updates for your hardware to increase performance or update certain software features.
With Xbox Live, when you sign in using your Gamertag, you are automatically notified of any new updates. How do you update your Xbox 360 without an Internet connection or a very slow Internet connection?
This issue is likely due to a high increase in update traffic on the Microsoft server due to the Xbox One console launch, similair to the launch of the PS4.
A possible work-around would be to attempt to update your console at a more optimal performance time, such as early in the morning (2AM - 10AM), as you are more likely to encounter a receptive updating time with people at school or work.
There are two ways to do this: either copy the update to a USB flash drive or download the update to your computer and then update your Xbox 360 console.
First, connect up a USB flash drive to your computer and make sure it has enough free space on it.Just scroll down to the Copy to a USB flash drive section and click on the Download the Update file link.https://com/en-US/xbox-360/console/system-updates-info#42c50946c0004f369026ca95e2579c01 It’s a little over 100 MB.The free version gets you free game demos, game add-ons, games on demand, arcade games, avatars, and voice/text chat.The Gold Membership gives you Facebook, Twitter, Last.fm, streaming Netflix, video chat, and Xbox Live parties.This is a minor issue and should be fixed within a few days after the consoles launch on November 22.