I have the xbox 360 arcade and was wondering....

I have the xbox 360 arcade and was wondering if i could still play and create a live account with no hard drive . I have the memory card 256 mb included.

Before anyone says that a hard drive is necessary for downloading arcade games etc. i don't want to know that all i want to know is can i create a live account before I go out and buy a starter kit and ethernet cable?

Thanks in advance. =D