Everybody knows about download bandwidth, which is usually just called downstream, or bandwidth. This determines how quickly webpages load, files download, etc. Browsing the internet is primarily download driven. However, it is still a two way street. When you type in a URL (like www.gooogle.com) you are sending a small amount of information to a computer (actually a server) somewhere which then sends you information back, which you then download and your computer displays the webpage. So browsing the internet is primarily download driven.
Xbox LIVE multiplayer matches are primarily upload driven (usually called upstream). What happens is one Xbox 360 "hosts" the match (he decides what is what in the match, whether you killed that person or not, etc). Anyway, because everything that you (the player) does must be verified with the host of the match, you have to upload information regarding every time you pull the trigger, turn, pick up weapons, grenade, etc. So we say that Xbox LIVE multiplayer matches are primarily upload driven. While you download information, the information is only the stuff relavent to you. You won't download as much information about a player 100 feet away who is off screen as you would someone who is right in front of you.
Typically, browsing the internet and Xbox LIVE exist harmoniously because one is download driven and the other is upload driven. However, two upload processes occuring at the same time (pictures and LIVE) can hamper both. Also important to note, with cable internet, the downstream capabilities are greater than the upstream capabilities. I can't say how everybody's internet service providers (ISP) operate, but typically the upstream is less than the downstream.
So anyway, that's why things went crazy last night. And now you know a little bit more about the internet in general, and what not. Enjoy.