LOL, where to start? Well, to begin, have you tried OnLive? They have about 200 games, many of which are in a 'PlayPack'. You pay $10/mo and it is like Netflix streaming, but for video games. You'll get to play as much as you want of those games. By subscribing to their PlayPack, you get 30% off all other purchases. OnLive streams the games to your PC, Mac, TV, and even tablet and smart phone.
Now for the XBLA question, I'm a HUGE fan of XBLA games. I have been picking these games up sinced they've been coming out and own most of the popular and highly rated ones. I also recommend the Xbox Indie game channel. There are several really good games in there for only $1 to $3. The indie games aren't as scrutinized, so many of them are duds, but they all have free 10 minute demos.
For specific game recomendations, I don't even know where to begin. Castle Crashers, Trials HD, Limbo, Braid, Toy Soldiers, Iron Brigade, Pacman Championship Edition DX, Geometry Wars, Splosion Man, Pinball FX, Bejeweled 3, Plants vs Zombies, Magic the Gathering, Shadow Complex, and many, many more--all of them VERY good.
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