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You need to explain how both consoles need to be running the latest Title Update for the retail to be able to connect to the system link. Also the Jtag will need to have the correct files such as; common_mp.ff; code_post_mp.ff; default_mp.ff and more to enable them to do system link lobbies.

Also you can connect to system link in many ways. It doesn't have to be how you have stated above. As long as both consoles are connected to the same internet system link should work.

You can also system link with other people who are not on your internet via program's such as XLink Kai or XBSlink.