Xbox – Using PC controllers with XInput on a 360

The Xbox 360, 250 GB S console has 5 standard USB 2.0 ports. Games like Rockband came with a USB hub that allowed more game controllers to be plugged in. The older models before June 2010 had 3 ports, two in the front and 1 in the back.

Most games are only going to be compatible with up to 4 controllers at most locally.

http://en.wikipedia.org/wiki/Xbox_360

Yes you can use more than 4 wireless controllers on some games. For example Gang Beasts, Knight Squad, Miner Warfare and Screencheat support up to 8 controllers via DirectInput instead of XInput.

XInput supports a maximum of four controllers at a time. This is an Xbox limit, carried over to Windows. Although as of 2010 few PC games require more than four controllers at once, DirectInput itself has no such limitation.

(Wikipedia, DirectInput vs. XInput)

DirectInput works with any controller including Xbox controllers. The use of DirectInput or Xinput is down to the developer or engine that they are using. It is not something that you can configure in Windows.

Update: I noticed that the upcoming windows wireless adapter states that it "(s)upports up to 8 wireless controllers". I wonder if they've removed the XInput limit and whether this will be for windows 10 only or if they will eventually backport to Windows 7.