Some of the new features are really simple, but very welcome indeed, such as displaying the name of the game in the DVD drive, rather than just 'play game'. Another great addition is the on-screen notification, which will tell you when you've accomplished an in-game goal.
There will also be built-in access to Live Messenger, which will allow you to talk to all your Live contacts, including those who don't have a 360, poor souls. There's a new menu that will tell you which games your friends are playing, and allow you to join them online for some Web-based fragging.
There's also a low-power mode for downloading game demos and video content. The Xbox will shut its fans off while downloading, then when finished it will fully shut down. We reckon this is a feature that really should have been included at launch, but we applaud its arrival now.
Video also gets a much-needed update. First of all, you'll be able to watch videos that are still downloading, so you won't be forced to wait till the download completes before hitting play. The progress bar will indicate how much of the video has downloaded.
Microsoft has added support for more video formats as well. The update will enable both H.264 and certain flavours of MPEG-4 video. Before you all get very excited, this doesn't mean your XviD and DivX video will suddenly play on your 360. This update only includes support for the MPEG simple profile, not the advanced simple profile -- which is what XviD uses.
The update will be made available to all Xbox 360 owners on 7 May and will be as free as a bird. -IM