I am selling my Xbox 360 to a friend, and I would like to give him access to the games on my Live account as well, so I just figured I would give him exclusive access to my Xbox Live profile. What should I do before I give him access to the account (apart from changing the password) so I am not damaged or disadvantaged in any way?
I don't think we can really provide any solutions for you without violating Microsoft's ToU.
To be honest I would actually just tell him to set up his own gamertag and profile because one thing you cannot do AFAIK is change the email adress associated with the gamertag so he's going to have problems if he ever has to contact XBox Live support since they will send emails to the address associated with your account in most cases.
Due to the way XBox DLC works generally if one person has downloaded it onto an XBox all users have access to it on that console, so as long as you don't delete your profile completely (i.e. turn off the auto-login for the profile and ensure your friend does not know the password) then he should be able to play the DLC already on the console.
Additionally if you ever decide to get an XBox again (or even want to play local multiplayer at your friends) you will be able to reuse your existing account.
If you do really want to just hand over your gamertag and profile I'd ensure you do the following: