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Surround sound: Is your XBox 360 hooked up to a TV? If so, is it HDMI? If that's the case, the easiest thing to do would probably be connecting you surround sound to your TV, which would, in turn, have audio carried to it from the Xbox via HDMI.
Music: All you need is WMP 11 on your computer. Have your Xbox on the same network as the computer and enable sharing, and voila. It's connected. I imagine it'll take awhile with that much music, but I've got over 60 gigs and it's never taken all that long to load the whole list.
Does the Xbox360 have a coax/optical digital output? If so, you can connect that directly to the speaker system as they have a digital/analog converter built in.