I've been able to preview the XBL update for a week or two now. Here are my impressions.
Netflix has been significantly improved, particularly in regard to speed. The stream buffers and correct itself much faster than before. In fact, corrections (adjustments when connection speed slows) usually take no more than one second. You can now see a list of shows you've recently viewed, which makes it easy to jump back into a TV series you were watching or resume a movie you were forced to stop. You can also add shows to your queue from lists of new arrivals and genres, including some tailored to your viewing habits. Oh, and you can now allow or disallow your friends to see what you're watching, so they can choose to join you in viewing. Overall, I'm very pleased with the Netflix update.
The other big change is the addition of Games on Demand. IGN has a nice breakdown of which deals are good and which are not so good. Why anyone would pay $30 for Call of Duty 2, a great game but a largely outdated one that can be found much cheaper elsewhere, is beyond me. On the other hand, Mass Effect for $20 bucks is great. You can pay straight by credit card or by Microsoft Points. It has taken me about an hour-and-a-half to download 52% of the 6.83 Gigs Mass Effect file with a cable connection.
You can now rate games using a 5-star rating system in the Game Marketplace. This applies to both triple-A titles and small indie games. A very welcome addition.
The Avatar Marketplace has potential, but is hard for me to get excited about so far. There are some cool items available, but I dislike the idea of paying for any of it when similar works would be free on a PC service. That said... *sigh* I've already purchased a hat -- an Irish tam similar to the one I wear in real life, which makes my avatar look very much like me. Cool items range from pirate hats and a Big Daddy helmet to a guitar and lightsaber.
If I were you, I'd hold out until Avatar Awards goes live. There's already a place for Awards in the menu below Achievements. Presumably, that will entail similar goodies awarded for free while playing games. Why buy that guitar now when I'll likely be able to get one free later for playing Rock Band 2 or Brutal Legend? As long as Awards are indeed free, and not just unlocked Marketplace items, I'll be happy.
Game save files in your HDD memory are now time-stamped, making them easier to manage.
Those are what I consider to be the main changes. There are some other things -- like the number on your Profile which may or may not accurately reflect the number of years you've been an XBL Gold subsriber (mine is incorrect). Here's Microsoft's press release for the update.
Facebook, Twitter, Last.fm and Zune Video are coming later in the year. I'm looking forward to the Last.fm radio service.
What are your impressions of the update?