WeaveMN

A couple points of clarity about XNA:

It is a Framework, a set of API's to help you code a game for both Windows and the 360 (and Zune in the future). If you make the game for windows you can distribute it in any way you want to, it is just like any other windows game you would install, building to the 360 is different and requires this "Community Arcade" to work.

As to the point about it only supporting a 360 Controller? Not true, unless you only coded 360 Controller code into your game and decided to completely ignore the Classes that specifically support the Keyboard and Mouse.