If by Live, you mean having to pay, then no, you don't have to have the paid XBL subscription to download demos. You can sign up for the free Silver XBL account I think and download the free stuff through that.
All you have to do is hook up your Xbox 360 to the internet. You will automatically be connected to Xbox Live and recieve a Silver account automatically. Silver account is a free account. You can use the Silver account to donwload demo's.
However, some demo's require a Gold subscription. Xbox Live Gold costs 50 dollars a year. You will also be able to play online and send messages to other people with Gold. All the other stuff can be done with Silver.
You can answer yourself your smart enough you said download to download stuff you need the internet seeing as the xbox 360 isnt a computer andd dosent have internet you need to connect to it and how do you do that with xbox live
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