It is currently, and has been known since the release of the Xbox 360 version, a well known glitch that Xbox 360 players will have their system freeze whenever they are in heavily populated areas.
It started in Beseiged and was only known to occur there. Then it started to move, as the players started occupying different areas. Square Enix / Play Online Tech Support has offered a select few answers to this known glitch, but none of the answers have EVER worked. Nor has anyone ever officially acknowledged this glitch.
It is now most commonly known in Abyssea areas. The system will start to experience lag in obscene amounts. Eventually, the system will completely freeze. A few of the "solutions" that have been provided are as follows:
~ Clear the Xbox 360 cache (a well known way to destroy your FFXI data and require a full reinstall).
~ Format your Xbox 360 HDD (this issue persists even on the new slim 360's, even if it has nothing else on it).
~ Check Files (nothing is ever found to be wrong, ever).
~ Delete and reinstall (still persists).
~ Contact Microsoft, because it's their fault (seriously, I have had them tell me it is not their fault and Microsoft is to blame).
These are just the "solutions" that I can recall off the top of my head. None of these fix the problem and I have had to deal with this since the release of Final Fantasy XI for the Xbox 360. And it is not just me, I have a lot of other friends that play (5 in Michigan, 4 in Georgia, 1 in Arizona, to name a few), plus many others that I have only spoken with in forums.
This is a big glitch that has never been addressed and is always shucked under the proverbial carpet as "not important." Since there is FINALLY a place that I can address this issue publicly, I would like to have it escalated to (hopefully) a final resolve. Or (at the very least) tell me it is not something that you can fix and apologize to all the Xbox 360 owners.
Trust me, there are currently no "solutions" that you have to fix this glitch without actually applying a patch to the game.
Edit: And in case you want this edited with the "official" template, just fill it in with whatever fits accordingly.
~ Everyone
~ Everywhere
~ All the time
~ Everything
~ And if you require specifics, it's already been stated.
If you want an official report, check my account. I have called in at least 20 times (sadly I am not joking) all about this same issue. You have it documented 1,000 times over, at the very least from the thousands of players that have experienced this same issue.
EDIT #2:
Any other people experiencing this issue, please reply for further proof and verification.