I (finally) set up my 360 + Halo 3 for some wonderful xbox live action.

My gamertag is Gnomemad

So my 2 questions for you guys:
1) How does the whole 'matchmaking' thing work? Does it try to match people up with similar XP?
2) I assume you can add friends to play against? Does it just then automatically scan for those people when you are trying to join a game?
and 3) (I lied about only 2 questions) What are some other people's gamertags?

Admins: I realize there have been posts like this in the past. I didn't want to revive an old thread, and I have questions other than 'post your gamertag'. Sound arguments?

Matchmaking will start you at the bottom of the barrel, and rank you according to how well you play, which usually seems to be determined by how many games you win, and how often you win. So yes. It'll stick you with people who play around the same skill level you're at, in an attempt to keep things balanced and fair.

You can add friends to play with to your Live Friends list. It doesn't scan for them at all when setting up games. If you want to play with them, you have to send them an invite, and they become part of your "party", which moves from game to game then. Some playlists won't let you play with people in a party. Lone Wolves is one of them, as it's ranked FFA, and having friends in there would make it easy to cheat. Generally Ranked Team games will allow friends. Social games will let anyone play with you, because it's completely unranked. So you can have a party with your friends in it, along with "guests", people playing in split screen with you on your 360. This also applies to Custom Games, but those aren't automatically set up. To play a Custom Game, you have to build your own party.

My GT is ReaverPhoenix.