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please xplain to me how this deal works

It looks like you need to sign a contract for cell phone service, and then they give you a 360 for $99.
 
Buy a rediculously over priced phone with a lengthy expensive contract and get a $99 XBox 360 that you'll still have to put about $200 into to be worth while.
 
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.
 
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