XBC doesn't cost anything, there is 3 different versions:
XBConnect 5.2 skinned(free):For high end PC's
XBConnect 5.2 skinless(free):Mid to low end PC's
XBConnect 5.2 Pro(14.95):Has extra features but has a cost
How to get it:You download it.
Which Xbox:Doesn't matter, xbox 360 would be easier I guess.
For details on how it works and how to download it, go here:
http://www.xbconnect.com/
Also Xlink Kai has much more players and is very similar to XBConnect, heres the link to that: http://www.teamxlink.co.uk/
[Edited on 07.17.2011 9:38 AM PDT]