a silver membership is the 'base' membership you can connect to live, you can download stuff from the marketplace (gold members get first crack at the newer content first, then it is available to the silver users later on). you can also get game updates
as well. but Gold is needed for online play, Internet Explorer, YouTube, Netflix, and other apps, as well as online cloud storage. If I forgot anything I am sure somebody else will pop in correct me or expand what I typed.
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