There probably would be some lag from time to time. I run a Xbox, Xbox360, and 4 computers on the same DSL line. When theyre all going depending on whats going on in the game there is lag from time to time. Ex: playing Halo2 on a BTB slayer map with about 5 vehicles exploding at the same time = LAG!
I would think 4 xbox's all running at the same time would cause, lag, I run on cable with 3 computers and and xbox 360, if anyone else is downloading anything, its unplayable.