Xbox Live concern about switching xbox’s and having the level of your rank change to the 1st level

Its like using the same account on two xbox. You can't do it.

Now there are obvious reasons why Microsoft doesn't want you to be able to use the same account more than once (which are compounded by DLC), but the bottom line is: you can only be logged into the same account in one location at a time.

Now you might want to consider the new Family Pack, which is coming soon. Or streaming your Netflix to a PC.

The short answer though, is: No

All you need is the game,internet and Xbox live gold membership.

To start it, click "Xbox live" in the main menu.
- Click custom games or quick match to join someone else's game. Pick the match you want to join and then it will ask you to choose your character. Everyones matches to choose from will be labeled by what level character they are and what quest they are working on.
- Click Create game to start a game with your character.