The house that Gates built will be launching XNA Game Studio Express, a set of (dumbed-down) development tools that will allow hobbyists and their ilk to develop games for both the Xbox 360 and the PC. Initially, these homebrew (is it still considered "homebrew" if you're using official tools?) games will only be playable to other coders part of a so-called "Creator's Club," a nice way to say that Microsoft will charge you $99 for a one-year subscription to play such games.
A beta will hit the streets before August passes into September; the final release is expected during the holidays.
Perhaps Microsoft wanted to tap into the same homebrew software community that brought us Xbox Media Center and ported over numerous emulators to the original Xbox? At least then they'd be able to control people's creations.