So I found the Word Wall for "Become Etheral" but when I try to unlock it, the game says, " Dragon Souls are required to unlock shouts." I currently have 3 dragon souls, or so my UI tells me. Am I doing something wrong or is this a bug?

You need to select the shout AND THEN press another button to 'spend' a soul. Not exactly clear at first.

Should tell you which one at bottom left of screen. On PC, it's the R key (Used for dropping items from inventory, sticking stuff in containers etc) so whichever the controller equivilent for those actions is maybe?

x button on 360. and i feel your pain. i had the same prob.

Thanks for the help!