Does XNA Framework support networking?
Yes. But only for Xbox360 and Zune. Check out the membership requirements.
Networking is supported on windows through Games for WIndows Live but only for development/testng purposes. Even if you get a G4WL license XNA Framework gaems are not currently supported. Or you can use Windows native APIs (see below)


Does the XNA Framework support Live Arcade on the 360?
No. You need to be a fully licensed developer to use the Live Arcade APIs. If you think your game is good enough you can go through the official channels http://www.microsoftcasualgames.msn.com/xla.htm. Microsoft currently has a few XNA Framework games going through this process and a few already released. See http://www.gamedevblog.com/2007/03/some_answers.html

Does the XNA Framework support Game For Windows Live?
No. The Games for Windows Live API is similar to XBL Arcade in that you must be a licensed developer to release a project utilizing it. CC Gold members can use a pseudo GFWL interface to network games between an Xbox and PC for debugging purposes, but this is not real GFWL and it will not work on consumers' machines.

But I want to award achievements and gamer score!
Let's be realistic here - if you could write an XNA framework game that awarded achievements and scores do you honestly think my gamer score would be as low as it currently is :-) There's nothing stopping you from incorporating an achievements-type system in your game if you're looking to provide gamers an incentive to play your game more. However, if you plan to release your game on Community Games, be sure that you don't call them Achievements. The community has agreed that the terms "Achievements" and "Leaderboards" are off-limits ad we know Microsoft has asked some games to not use them

So what can I do on Windows XNA games?
The same as you always had to do. Write your own! Use System.Net. Note that System.Net does not exist on the Xbox so this code will be Windows only. Since this is NOT part of XNA questions should be asked in the MSDN .Net networking forums.

What about DirectPlay?
DirectPlay is old, deprecated and not supported any more. Don't touch it!

Are there any pre written libraries for Windows networking?

• Lidgren is a Client Server messaging using UDP http://code.google.com/p/lidgren-library-network/ (there appears to be some helper code for XNA in the library too)
• Metro is a open source networking library for C# but not gaming specific http://sourceforge.net/projects/dotmetro/ 
• General managed networking clients (e.g. IRC, POP etc) http://en.csharp-online.net/Open_Source_Network_Clients
• http://www.codeproject.com/cs/internet/sockets.asp - couple of links at the bottom of the article as well
• http://www.codeproject.com/cs/internet/xynetsocket.asp