I've often wished for the same thing. I love playing multiplayer games, but most of my friends and family are non-gamers. The Guy Game is actually really good, but obviously inappropriate for most families (it's a You Don't Know Jack-style trivia game where you get to see topless Spring Break girls if you answer questions well).
Worms 3D is probably a decent game to fit the bill, but I haven't played it yet. Actually I've never played Fusion Frenzy either so maybe I'll have to check that out.
Anyway, I'm also interested in good multiplayer games for the Xbox so keep us posted if you have any luck.