The Xbox Originals service will let you download original Xbox titles like Halo, Fable, and Game|Life favorite Psychonauts for 1200 points each. They won't have achievements, and they'll have all the same emulation problems they've always had, but it'll save you from scouring the shelves at your local GameStop for that scratched up copy of Crimson Skies.
If you'd rather keep things a bit more current, a number of Xbox Live Arcade games are now lower-priced Hits. Bankshot Billiards 2 and Lumines Live have been marked down to 800 points each, or for 400 points you can get Zuma, Marble Blast Ultra, or Small Arms. Still not sure the Billiards is worth it, but Lumines for 800 points? Heck, yeah.
New social networking features let you see your friends' Friends Lists, which is sure to cause problems with jealous boy- and girlfriends, mark my words. You'll also be able to expand your bio, providing more detailed information about yourself to the Xbox Live community.
The Family Timer lets parents set limits on their kids' 360 playtime, and apparently I wasn't the only one going blind trying to watch those itty-bitty move previews, because now you'll be able to see them full-screen. The update also comes with "enhanced video codec support," which means that your DivX and Xvid files will play on your 360. For a bit more detail on the video support, look here.
The dashboard tweak also paves the way for Inside Xbox, a news feed service that kicks off on the 11th. The service will keep you up to date on 360 news like game releases, events, and Marketplace offers, but of course you won't use it, because that's why you come here. Right? Right?
