Question about Multiplayer with Co-op?

Im new to Halo and Xbox live and had a question regarding the multiplayer aspect of Halo: Reach. Is it possible to play through Xbox Live in multiplayer matches with a friend who is using the same console? I understand that the game is Co-op, but was just wondering if its only multiplayer from the same console when NOT using Xbox live, or if you can essentially have your own team for online play with everyone sitting on the same couch and using the same xbox?