The game is plenty playable on the Xbox itself, but will you want to finish?
That being said, the gameplay consists of "teams" of characters defined by connections or personalities to one another. Each member on a team is then further classified by a dominant trait of which is either speed, power, or fly. Speed characters, such as sonic, in general will be used throughout most of the game in order to progress faster and quickly get the jump on enemies. Power characters, such as knuckles, will be used to break objects or areas, float to certain areas of the level, or in combat against ground enemies. Fly characters, such as tails, are used to combat aerial enemies and traverse over gaps which could otherwise not be reached by or kill the entire team.
The story is VERY light hearted, with many discussions and events focusing on each team's ability and thoughts to help each other and conquer adversity with "the real super power of teamwork!". The story is bridged rather well in writing transitions and such from place/team interactions should they discover one another keeping it short and sweet.
Unfortunately it is that same element which damns the entire game for many. 3 out of the 4 teams play exactly the same, with the only differences being their difficulty level. It literally boils down to having to play the same game, 3 times in a row, making the broader part of the game horribly stale. The only team that differs in their objectives is the chaotix, who make a return from their 32X debut. Teams Sonic, Rose, and Dark all have to reach the end of the level and be done. Sonic is normal, Rose is easy/short, Dark is harder/longer. Team Chaotix has at least 3 different objective types: Reach the end of the level, collect x amount of certain items, Don't get spotted by any enemies, and or Destroy X amount/type of enemies.
While they add variety to the game and certainly serve to spice it up, a few of their missions actually end up being more frustrating, such as Metropolis and Mystic Mansion which assign elimination of 85/ 60(respectively) items, but only put in that amount, meaning that if you miss one, You'll have to go through the whole level just to find it.
As with previous sonic games, if you want the final story/Good ending of the game, you'll need to get the chaos emeralds. The chaos emeralds are in special stages that hearken back to Sonic 2. In order to get to the special stages you must collect and keep a key that is on the level in a box. You lose the key when you are hit, but there are multiple keys on the level making it easier and the special stages themselves are not too difficult.
Certain levels on the Xbox version such as Ocean palace has a severe framerate problems and tend to hamper the gameplay experience. Though the Xbox is mostly free of such in comparison to the PS2. Overall Sonic Heroes is a game you can find fun and play, but only so much before you just lose interest in it all together.