Let me preface this post by saying that Xbox Live is essentially an awesome service.
Is $15 per month greedy or perfectly reasonable? I have no idea. But I do know that being able to download demos and trailers of console games quickly and easily is phenomenal, the Arcade rocks (I have 12 XBLA games now), as does the ability to rent HD movies and TV shows digitally, and I don't mind paying something per month for what is generally a smooth and well-organized multiplayer experience (which includes online co-op for many games -- something not available to console gamers before). I have a lot of respect for Microsoft's game division and its online service.
That said, here are some mistakes that are blatantly obvious and inexcusable after being ignored for so long. I mentioned some of these problems on their official forums over a year ago. I know that some things aren't simple to fix when they seem so, but Microsoft has had so very long to notice these problems and address them.
There's no universal volume level. Some trailers are louder than others; some games are louder than others. Why must I have to adjust my TV's volume between media so often?
A fundamental step in audio mastering is "normalization" -- increasing a song/track's basic volume to the maximum pre-distortion level, so that it plays at the same volume as everyone else's media and doesn't make listeners worry that the next thing they play might blast out their eardrums. This should be happening with everything on Xbox Live... either at the developers' end or at the host's (Microsoft's) end. Either way, it's Microsoft's responsibility to see that it happens.
No adjusting the queu
There's no user ability to adjust the order in which queued files will be downloaded. So if I'm already downloading a couple demos when I spot a trailer I'd like to watch, then I can't prioritize the trailer without cancelling the demos (and finding them again to download, hoping I won't see anything else I want to view or play before them).
Blockbuster Online, Fileplanet, Gamefly, and every other queu program I can think of includes a capacity for reorganizing downloads. Why not Xbox Live?
No 3-way private chat?
While playing Call of Duty 4, as many as 18 people are automatically included in the game's chat channel. So there's obviously no bandwidth barrier to allowing more than two people to speak in one channel. Yet only one person can be invited to a private chat channel. If I try to invite a second person, the first channel is closed and a new one is opened. Why?
Auto-logging the wrong profile
When I boot up my 360, I have it set to take me to the dashboard. It doesn't automatically log into my user profile, but instead waits for me to log in manually. And I don't mind that. What I do mind is that it automatically logs into the second/guest profile whenever I create one (when someone needs a profile to play with me offline, for example).
Let me repeat: it automatically logs into the guest profile, making me exit that profile before I can log into my own/main profile, but it doesn't automatically log into my main profile. Needless to say, this encourages me to delete my guest profile whenever one's not needed, so I have to recreate one whenever it is needed again.
A minor annoyance becomes a major annoyance when frequent.
Before I bought NCAA Football '08, I checked Microsoft's official Xbox site to find out if it had co-op. Sure enough, the site listed co-op gameplay. What it failed to mention was that co-op in that football game, like so many games for the 360, is online only.
That's no minor qualification... I was more than a little disappointed when I got home with the game and learned that my family couldn't play with me, only against me. It effectively meant there is no co-op in that game for me, because the people who want to play with me don't own their own 360s, I don't know enough people with 360s to play a game with more than one other person at a time (two players online must play against one another), and -- like many gamers -- I don't find playing with strangers as fun as playing with friends and family. Catan is another game that surprised me by not having local multiplayer; only online multiplayer.
Co-op/multiplayer is "online only" or "requires 3-4 players" -- such a brief yet important description that fails to make it into so many of Microsoft's game summaries on the boxes and on their site. This is very basic information that shouldn't have to be found by scouring reviews somewhere. If it's not lying, then it's damn close.
Did I miss anything? Does anyone know a secret to opening 3-way private chat channels on Xbox Live?