The GHIII Xbox guitar (xplorer) is a USB guitar.  I am not sure if it works with xbox Rockband but it does work on the PC to be used with Frets on Fire.  If you do use FoF I would suggest the Alarian mod (renamed to FoFix in the google code application) as this is one of the most complete mods out there.  They have support for drums already but haven't increased the players to more than 2 yet.

I got the USB driver installed from installing and playing GH3 for the PC.  If you have ever used any xbox controllers on your PC you already have the driver for the guitar.   If you haven't there is a driver install from M$ that makes it work.  I think this is the correct one.  If not I have it downloaded on my home computer and can send it to you.

Just in general, RB will work with the GH guitar controllers (except on a PS3, but that's another bull crap Sony story). Harmonix want to make RB a "platform" that interoperates with several third party devices, so they are all about the openness and compatibility of their system.

http://www.microsoft.com/hardware/gaming/download.mspx is the proper link and it works perfectly.