As far as I understand it, other people can log into your console to play the game, or you can log into someone elses console. You cannot lend games to anyone to use on another console without giving them access to your account.

They also places very clear restrictions on selling used games.

There is no reason why these require additional payments or phone home every day. Phone home on activation or trade would have sufficed, and I would have cheered it all the way.

The original plan let you designate 10 accounts that could play any of your games (although only one account plus the main could play a game at once- no buying one copy of Halo and then having all 11 of you get online at once).

The check-in is required in order to remove old games from your account, not to add new games. It's to make sure you still have the license to the game that you're playing. That's far more generous than Valve's "no you can't sell used games ever"

So what is the point of the once per day online requirement?

And what is the point of restricting used games?

There are no technical reasons for these (as I have explained in other posts), and so people are justifiably were livid.

If your friends can play your games at any time, it means that the game is not tied to a disc, it is tied to your account. That makes it more like Steam. How does one sell a used Steam game? The answer (for all current digital services) is that you don't- there is no used market for any game that requires Steam or Origin or any other digital service.

Microsoft wanted to change that. But in order to implement something resembling used games, you have to remove access to the game when someone sells their copy. And the only way to do that is to have the console verify licenses. The easy way to implement that is with a license check every time you start the game. Microsoft tried to be nicer than that by only checking once every 24-hours so you didn't always have to be online.

The once per day is to ensure you still have legitimate access to the game.

The point of restricting used games is that all games are treated as digital downloads, whether they are delivered over the internet or through a disc install.