Xbox 360 VERY SLOW when connected to live?

So today some friends came over, and we popped in Halo 3 the Xbox just Shut off and we got a red light, reset the system and it was fine, Later we logged into LIVE and the system was just so slow! like Dial Up internet slow......This only happens when you connect to live, I use a Laptop with an Ethernet cable to log on, As soon as i unplug the Ethernet cable The system starts loading faster and goes back to normal again.....Anybody know whats going on? or is it just me, (note) google searches were useless and My xbox has never been opened or tampered with