Following a rumor yesterday that a virus was in circulation that had the potential to wipe the contents of an Xbox 360 hard drive, Microsoft has issued a response which implies the Xbox 360 is not susceptible to any kind of virus. They give three reasons as to why the Xbox 360 is secure - the 360 is not a closed computer, the Xbox only receives an IP when connected to Live and lastly the Xbox never listens to incoming connections on a nonsecure IP port.

Quote:
"I do apologize for the inconvenience. I understand that you are concern with regards to virus on Xbox Live that may affect your Xbox 360 console. This not possible, First your Xbox console is not a closed computer. Very little code is shared between the Xbox console and computers. Therefore, attacks that infect computers will generally not affect your Xbox.

Second, your Xbox only receives an IP address when connected to Xbox Live. Otherwise, it does not have an IP address, even if the cable is plugged in. That cable is turned on under only two circumstances: one occurs when you actively play Xbox Live; and the other occurs during System Link play. For System Link play, your Xbox does not actually use an IP address.

Third, at no time does your Xbox actually “listen” to any incoming connections on a nonsecure IP port. It is impossible for a virus to attack an Xbox on an IP address if the Xbox is not listening to an incoming connection.”