One copy of each game for each Xbox console is required to use System Link.
The purpose of this is to have multiplayer gameplay on multiple consoles, which allows for a non-split screen multiplayer gaming experience and far more players in one game than a single console can support.
Halo: Combat Evolved allows up to 16 players on split screens on four consoles to partake in a simultaneous 16-player game.
The primary advantage of system link is to allow users to host their own games and control the settings.
The Xbox 360 can not only use wired Ethernet to connect to a LAN, but also use a wireless adapter (such as the Xbox 360 Wireless Network Adapter in an access point-based or mesh network).