Have I been sold a counterfeit game?

No, I did. I just think it's funny that they're banning people who got 'counterfeit' money in GTAV O. It's like all the money in the game is counterfeit!

I'd venture a guess that you have a counterfeit HDD.

All my stuff is official Microsoft Xbox 360 stuff I know about the counterfeit HDDs and mine if official not 3rd party. I have the game now it works like a 360 game xd

You should contact Ebay about the misrepresentation of the product on their site.

China has open stories, with the apple logo, that sell knock off Ipod and iphones.

But there is nothing they can do about it - this is probably a similar case.

The book is one of the items in the chest in the Chamber of Fate (Guild Cave).

I did the following to get it:

1. Log on to lionhead.com with the Windows Live ID associated with your xbox live account.

2. Turn on your xbox 360 and log on to xbox live. ( I also started Fable II and went to the Guild Cave but that may not be necessary.)

3. I then went to
lionhead.com/.../experience.aspx. The screen should say the items have been sent to your chest.

4. Logged off lionhead.com and saved the game that I was playing.

5. I did not play the game for 3 days, when I started it the next time I played, my dog barked in the chamber of fate and I was able to open the chest.

If you are not able to open the chest after 3 days, try to contact lionhead studios or xbox.com support. That may have been the difference this time I tried. I had sent an email to lionhead regarding the issue and they said to talk to xbox.com support.
When I contacted xbox.com support, they said that they don't provide support for in-game play.