You cannot turn into a werewolf in Oblivion, though you can turn into a vampire by being bitten by vampires, though there are another source of becoming a vampire, you find it out, I am not going to tell it...
No. You can trade in your xbox for whatever they will take and save money to combine until you get a 360, but you can not turn a regular xbox into a 360.
You can't start the quest. You have to find the skulls on your own, with no map markers, and return them to the ghosts. The quest does not appear in your journal.