when you first create an Xbox Live account, it's a Gold account. that will be your 1 month. you hit your Xbox Guide button on the controller (the big X in the center of your controller). you go to the rightmost tab called settings. then select "Profile". you'll see your gamertag name in the upper right corner. if it's a yellow/gold color, it's an Xbox Live Gold account. If it's a gray/silver color, it's an Xbox Live Free account (formerly called Xbox Live Silver and still commonly referred as such by Xbox gamers).
you have multiple options for accounts:
1) create a local system account (no Xbox Live at all). this isn't really necessary as the Xbox Live Free account is free and has a lot more functionality)
2) create an Xbox Live Gold account for a single person
3) get the Xbox Live Gold Family pack which is 4 Xbox Live Gold accounts. 1 account is the administrator, responsible for the billing and management of the 3 subaccounts.
most of the apps are self-explanatory. some don't require any login. some do. some require that code and activation like you described. you load the app, follow the steps, get a code. then go to a web browser and type in the code which links the account to the app and then relaunch the app to watch your content.
You should also check the Xbox Live Support page which has a lot of good information:http://support.xbox.com/en-US?xr=crumbnav
if you skipped the process of creating your free Xbox Live Gold account, you should see a social tab along the top of the screen (in-between home and games). this is the tab regarding your account. you should see a "join the fun" button as well as a sign in or out button. if you select the "join for fun" button, you can log in or create a new account. if you select "sign in or out" you'll see the standard account management stuff where you see all the gamertag profiles on your Xbox. if you scroll to the far right, you'll see "create a profile" and "download a profile". "create a profile" is to make one of the accounts I mentioned above. "download a profile" is to add an Xbox Live account that was created previously and is for people who have added a new Xbox to their other Xbox systems.
the home tab is the default page for your Xbox. the "my pins" is where you can pin your favorite websites, your favorite games, etc." recent is your most recently accessed games or apps. the apps tab is the central place for your apps. "my apps" are the apps you downloaded. "browse apps" shows the entire available selection of apps out there. note that each tab (whether it's social or games or tv & moves, etc. has a search button that's contextual meaning if you're on the games tab, it'll search games. if you're on the tv & movies tab, it'll search multimedia stuff. if you're on the music tab, it'll search music. the bing tab is a general search.Edited by onlysublime - 12/25/12 at 8:28pm