Does not involve any networking traffic but can be used for split-screen gaming on a single Xbox 360 console.
Connect multiple Xbox 360 consoles or computers over a local subnet. These machines do not require a connection to Xbox LIVE or any LIVE accounts. However, connection to machines on different subnets is not allowed.
If you are a Creators Club developer testing your game, you can use this type to connect an Xbox 360 console to a computer. However, cross-platform networking is not supported in games distributed to non–Creators Club community players.
Uses the Xbox LIVE matchmaking servers. This enables connection to other machines over the Internet.
All session matches are ranked. This option is available only for commercial games that have passed Xbox LIVE certification. Due to the competitive nature of the gameplay, this session type does not support join-in-progress.