Mark is correct. Its also worth remembering (or knowing) that experts say it takes at least 3 weeks of immediate, constant reinforcement to change behavior.
Taking away his xbox is not going to help much because what will you do when he messes up again?
A very good book that gives the details behind timeouts is - "SOS Help for Parents," by Lynn Clark.
I also like Mark's point about getting him evaluated by a professional. He does show signs of ADHD - check this link for symptoms - http://www.help4adhd.org/about/what/WWK8
Finally, if you feel like doing some reading, you might want to check out these two links below involving kids with somewhat similar kinds of problems. Lot of recommendations are made as well as books to buy. Some of it may be useful.
http://www.medhelp.org/posts/Child-Behavior/son-with-ODD/show/2078236#post_9846400
http://www.medhelp.org/posts/Child-Behavior/Im-losing-sleep/show/2077099
I have two recommendations for you - Though taking privileges away can be effective, timeouts for an 8 year old would be more effective primarily because he will feel the consequence of his behavior immediately. He should sit in a chair in a corner that is free of distraction for 8 minutes (1 minute per age). Timeout rules should be established. If you son breaks the timeout rules during a timeout, simply stop the time and restart it once he begins following the timeout rules. Never add time to the timeout as this would cause learned helplessness to develop. And above all, give him none of your attention while he serves a timeout. If he breaks timeout rules, only address the rule he breaks. This way, he will come to understand that only when he chooses to behave will he receive your attention.
Remember, discipline doesn't change behavior. Your son has a freewill to behave as he chooses. Discipline is merely an incentive for behavioral change. Therefore, even if he continues to misbehave after a timeout, it isn't the timeout that is not working, it is your son refusing to behave. So, continue enforcing timeouts per misbehavior and never expect the timeout to fix the behavior.
Secondly, I would consider having your son evaluated by a mental health professional to rule out emotional problems that might be contributing to this behavior. I would also consult with the school counselor as he/she might be able to provide some support.