XBox 360 MTU's too low

the MTU is just the maximum amount of data that will be sent in a single packet.  Unless your router or modem have a lower MTU than your xbox, this shouldn't be a problem.

What is your upload speed?

I don't know how to check what the actual value is on the XBox; it just tells me whether the test passes or fails, and it wants 1492, which is what I have the router set at.

Here are the results for upload speed:
whatismyip.com Chicago to San Francisco, 418 kbps
whatismyip.com Chicago to New York, 431 kbps
speakeasy.net Chicago to San Francisco, 432 kbps
speakeasy.net Chicago to New York, 435 kbps

The listed values above are definitely not good, VF...  I suggest you contact your ISP and have them check your line to localize the problem to either their WAN or your LAN.
Regarding your specific Qs..
Does the MTU depend on the download speed?
- download speed is the line speed "provisioned" / configured by the ISP.  The MTU (max transmission unit) is a network packet parameter that sets the max packet size of your network uploads.  If too large - the packets will get fragmented. If too small, the packets will need to be sent in multiple "chunks".
Is there diagnostic software that will tell who is at fault? (XBox network, AT&T Internet connection, XBox console or router)
- The ISP is responsible for checking and maintaining their (WAN) network  & conversely, you will be responsible for yours (LAN).  The ISP has the tool$ to verify the operation of their network...  However, due to economics and varying levels of technical expertise - they (or you) will never be 100% accurate.
Do you have any suggestions on how to proceed?
- Yep, call the AT&T and have them run line test and verify your circuits provisioning.  BTW, I recommend you check (post) your line specs (e.g., speed, noise, attenuation, etc) listed inside the CPE interface before and after the call to the ISP tech support to confirm their findings a/o fixes.
P2E

What type of Internet connection do you have?  Based on your speeds it looks like you have a asymmetrical link that is something like 3Mbps downstream and 512 Kbps upstream.

Your speeds are not great, but not that far off based on a 3000/512 Kbps connections.

MTU size will effect throughput.  The smaller the MTU the more packets you must send and the more overhead and so the lower the "user" data throughput you get.  The larger the MTU, the fewer packets you get, the less overhead so the higher "user" data throughput you get.

However, the basic throughput difference between 1492 and 1500 is very, very small.

What type of error does your son see that tells him the the MTU is too low?  According to what I have found, XBox live requires a minimum MTU of 1364.  Which means 1492 should work fine.

If there is really a MTU issue, it is possible that it is with another device somewhere in the Internet between you and the XBox Live "servers".   MTU is set on any and every IP enabled device, so there could be an issue with some device someplace that you have no control over.

giltjr - You are correct, my connection is 3000/512 Kbps through AT&T.  It sounds like I'm at the mercy of the Internet, sunspots, and astrological signs as to whether I'll be able to connect to XBox Live on any given day.

P2E - AT&T level 2 support told me that the MTU is the MTU, regardless of the upload speed, and as long as they are providing a connection and I am successfully surfing there's really no problem except with the XBox.

At a friend's suggestion I changed the MTU to 1402 and reran my speed tests.  While the download speed suffered, the upload speed dropped from only from 430 to 415.  I rebooted the XBox and tested the Live Connection, with the usual results:

Network adapter - wired
IP Address - confirmed
DNS - confirmed
MTU - failed

When I select More Info I see:

W: 0000-000B
X: 0000-000D
Y: 0000-0000
Z: 0000-0000

Basically I'm timing out.  I'm resetting the router's MTU back up to 1492 (which AT&T insisted on, as opposed to 1500) so I don't kill my browsing speed on regular PC's.

AT&T recommended calling Microsoft to see if they can get in to my network and then into the XBox console and maybe run some diagnostics from their side.  Does this sound like something they can actually do?

giltjr - Thanks for the clarification on PPPoE; that makes sense.  At your suggestion I ran the ping command with the -f and -l switches and was able to leave my router at MTU 1492.  Also, I'm using TCP Optimizer from SpeedGuide.net on my two computers to set those devices as well.  I checked Google for reports of known XBox outages, and the only ones I could see were from November 2007, January 2008 and September 29, 2008.  I also noticed that the Support page at XBox has a graphic at the top to report the current status of the XBox Live network.  See below for MS running tests.

P2E - Thanks for your suggestion on checking the router's firewall and specific gaming ports.  I verified my settings against Microsoft KB article 908884 (step 3 for shared connection with a modem and a router) and they were still good: UDP 88, UDP 3074 and TCP 3074.

Now, on to the "solution".  Since I had a vacation day at home, I spent 45 minutes on the phone with XBox support.  He said Microsoft is looking into remote diagnostics in the near future, but the capability doesn't exist today.  Our drill consisted of:
plugging and unplugging cables
rebooting the router, modem, computer, and XBox console
connecting the XBox cable directly to the modem (which involved changing IP and gateway addresses a few times)

With all of that, I had also changed the XBox settings from manual to automatic and back again.  Here's the frustrating part: for no reason at all that my tech agent or I could discern, the darn thing decided to connect after I restored my manual settings to the way they were before the phone call.  So I guess my short "solution" for next time would be to reset the XBox back to the factory settings, power it off and back on, and change back to my custom manual settings.

Thanks to both of you for all of the information; once I figure out how to do it, I will split my 500 points for this question between the two of you.  I appreciate your time, and hopefully whatever we've documented in this issue will be of some value to the next frustrated XBox Live user.

Cheers, Alan

Remember, XBox runs Windows.  That is the same thing you have to do to get Windows to work sometimes.  :)

Hmmm, duplicate the config, boy does that sound a bit familiar.  Appreciate your thorough answers and detailed problem descriptions, as they greatly help the experts understand your full situation from various perspectives... Kudos to you for your communications skills.
and uh, I am glad your XBox decided to work, again.  ;)
P2E

As a follow-up, I have not been able to connect to XBox Live since the last posting on 11/22/2008.  I went another round with both my ISP, AT&T, and Linksys, before calling XBox Support back.  By the way, AT&T said a Linksys WRT54G is "not compatible" with XBox Live, and that I needed a 2-Wire Home Gateway, model 2701, which they happen to sell.  Linksys confirmed that this is hogwash.  The WRT54G  ** IS **  compatible with XBox Live.

Also see the following links:
XBox article 958430 (When you run the Test Xbox LIVE Connection, the Test Status for Internet displays "Failed" (NXE)), last reviewed 11/14/2008
http://support.xbox.com/support/en/us/nxe/kb.aspx?ID=958430&lcid=1033&category=live

Step 3B says "Confirm that you are using an Xbox LIVE-compatible ISP.  To view a list of compatible ISPs, visit the following Xbox Web site:"
http://www.xbox.com/support/connecttolive/xbox360/isps/intro.htm

AT&T is listed there.

Finally, the results of 40 minutes on the phone with an XBox Live support agent, followed by 15 minutes further with a supervisor.  Effective 11/19/2008, 3 more ports need to be forwarded when going through a firewall:

TCP3074 already referenced
UDP3074 already referenced
UDP88 already referenced
TCP53 new
UDP53 new
UDP80 new

Opening those three new ports solved my connection issues; I am now connecting reliably.

I may have written down one of the new ports incorrectly, and will retest on Friday, 12/26, but below is a link to the relevant XBox article.  This was NOT an MTU problem, it was a firewall problem caused by the XBox network, nothing on my side.  Note the last review date.  :-)

KB908874 Description of Firewall Ports for Xbox LIVE
Last Review: December 23, 2008 - Revision: 7.0

Port 53 (both TCP and UDP) are used for name resolution and so if these were not open, you would not be able to enter https://www.experts-exchange.com and get there.

Not sure what UDP port 80 is used form.

Ive had this problem before. If youve dedicated an ip to your xbox you also need to dedicate ips to any other machines on your network. When the xbox is off the router cannot see a static ip and may assign the ip to another machine that was rebooted. And if the xbox and another machine are on the same local ip The xbox will give you a mtu error message while running the network diagnostic.

Try setting static ip adresses to all the machines on your network. it may help

Actually, I haven't had a problem with anything else on my network.  The only static IP is for the XBox; both of the desktops and my work notebook are perfectly happy using DNS.

re: XBox article 958430 - check/set the dns settings in the xbox.... it will likely be the IP Of your "default gateway" (e.g., 192.168.x.x)..  If you can manually enter DNS server(s), add 4.2.2.2 to the primary and lv 192.168.x.x as the secondary...  P2E