512MB of Cloud Storage
Ever wanted to access your Xbox Live essentials from another console? Now you can do just that with the addition of cloud storage. With it, you can download a My Xbox Live profile, game saves, and achievements to a buddy's Xbox 360 game console. In addition, cloud storage lets you treat your virtual system as a memory card that you can use to save game progress.
New Content Partners and Live TV 
Microsoft has expanded the Xbox 360's entertainment value by adding a slew of new content partners to its Xbox Live service. U.S.-based entertainment-seekers can tune into EPIX, ESPN, Hulu Plus, Netflix, MSNBC's Today, and other destinations from within their video game consoles—with the promise of even more to come. A MSNBC Today video story about Alec Baldwin's alleged Words With Friends meltdown played back smoothly, but the video quality looked roughly that of standard definition TV. Some of the content partnerships will result in Kinect-optimized apps that may or may not require an Xbox Gold membership ($9.99 per month or $59.99 per year).
New Kinect-Enabled Abilities 
The Kinect peripheral becomes even more useful with this system update. For example, Bing for Xbox (Microsoft's new voice-based search engine), lets you find content simply by speaking a few words. If you want to watch X-Men, you can simply say, "Xbox Bing X-Men" and Bing for Xbox will pull up all X-Men related games and movies stored in your Xbox 360 game console. You can then say "Xbox Play X-Men" to start playing the movie. You can also type search queries using the Xbox 360 controller. Deeper Kinect integration across the interface as a whole means that you'll use the controller a lot less.
New Social Networking 
Beacons and Facebook gives Xbox 360 games more ways to socialize than ever before. Before jumping into an episode of The Office, you can create a Beacon to let your friends know that you want to play Halo: Reach. You then relax until the Beacon notifies you that an Xbox Live buddy is playing your title of interest. But that's not the only feature that connects you with other Xbox Live users; Facebook Sharing lets you showcase your achievements and in-game accomplishments.
New Windows Phone 7 Xbox Companion App 
Microsoft's free Xbox Companion App for Windows Phone 7 handsets works in conjunction with the new Xbox 360 firmware to give users remote control (such as play, pause, forward or rewind the playing video or music) over certain services on the console. In addition, users can search the unified Xbox catalogue for movies, TV shows, music, videogames and apps, and view achievements and friends' activity. The Xbox Companion app can also be used to purchase music and video.
