You pay:
[*]$30 for phone
[*]$40/month * 24 months = $960 for crappy service (more $$$ if you want more service)
[*]$36 to activate service
[*]$99 for the XBox 360
[*]Total: $1125 for your XBox.
Note: Add in extra costs for out of area calls, over the minute charges, misc. fees, money to get the XBox extras, etc.