This November, the Xbox 360 will turn three. So far, it's been a profitable and successful system for Microsoft, capturing the attention of developers, snatching exclusives away from the PlayStation 3 and gaining lots of street cred from hardcore gamers. But in spite of this success, Microsoft has chosen to make an aggressive, totally unprecedented step. They're completely overhauling the Xbox 360 firmware with a free update called the New Xbox Experience (NXE) that hits consoles on November 19th. Functionally, it's hiding at least one killer app. Visually, it's a bigger jump than Windows XP to Windows Vista. Given that NXE is a mandatory update for anyone on Xbox Live, it's a good thing we really, really liked it.Navigation The NXE Dashboard looks entirely different from the old sliding blade system. In fact, it looks a lot more Apple than Microsoft, with sharp image-based navigation and a subtle icon reflection on the Cover Flow-esque surface where 360 content sits. And you'll notice immediately, it's fast. Animations are very smooth as you flick through content, with little to no noticeable caching. Those occasional hiccups from the old blade interface have been burped out. S You might not understand how to get around NXE at first glance, but after a moment the system sinks in. Despite all those pretty icons on the right, the primary folder navigation can be seen on the upper left. It's a simple vertical list. Up and down changes your folder. Right and left selects the content from that folder. • My Xbox is your home base, leading to your games, profiles, media libraries and settings. • Friends shows all of your friends and their avatars. • Inside Xbox links you to Microsoft-sponsored 360 videos, games and previews, from gaming tips to movie trailers. • Events houses all of the scheduled 360 online events, like family play nights, "Gamerchix" girl nights and game-specific marathon play fests. • Welcome introduces you to the main features of NXE, and it can be removed when you're done with it. It's the only folder that can be removed on NXE. • Spotlight is sort of a mix of My Xbox and Inside Xbox. It's actually completely superfluous given the other categories, as well as misleading because it looks so much like My Xbox with your avatar there. And yes, icon two is a Subway commercial—or any ad Team Xbox wants to serve up. S • Game Marketplace is all about new DLC and community games. • Video Marketplace is like the Game Marketplace but for movies. This is where Microsoft tucked the one and only Netflix icon. Why isn't Netflix in My Xbox if you're a subscriber? The categories do feel a bit heavy, and unfortunately, you can't tweak folder contents in any way. So say you want to stick Netflix into My Xbox since you have a subscription…too bad. It can't be done. What's great is that when you are buying arcade titles, browsing movies or sorting through other long lists, the interface shifts from the large Cover Flow icons to a nifty three-sheet page layout, allowing you to access more information easily. S So that's the pretty view. But there's a whole other (faster) way you can navigate through your 360. In fact, you could operate the entire device by hitting the Xbox button and pulling up the Quick Launch Bar. S The QLB is gray and blue (and for some reason, the text is a bit soft—I wish it were sharper), and it brings back the blade interface of yore. Not only can you pull up the QLB from the main menu, but you can pull it up from anywhere at any time, even in games. S Why is that access so convenient? Well, say you are playing Fable II. You can pull up your QLB and find a list of your most recently played games. Select one and you'll hop from one title to another without tediously returning to the main menu. The same rubric applies to music, downloads and pretty much everything else you want to do on the 360. Oh, and it's the best way to circumvent Microsoft ads and promotions because it has none. New Features Avatars Yes, we get it, Microsoft totally stole their avatars from Nintendo. Whatever. Good consoles borrow. Great consoles steal. Moving on… S The NXE avatars reach a whole different level of sharpness and detail when compared to their Wii counterparts—though that's a good and a bad thing. The clothing, hairstyles and facial features are far more, well, impressive. They look great in HD, like a Mii after it hits some sort of technological puberty. You don't just slap on a generic red shirt, you dress realistically in a pair of cuffed jeans and felt blazer. There's just a whole different level of detail going on here. S But that detail, mainly regarding hair, face and eyes, means that it's far harder to make your avatar actually look like you . NXE's avatar art package simply doesn't promote the universality of Nintendo's Mii. My Mii looks just like me. My wife's Mii looks just like her. Our NXE selves look like siblings, cousins or just some weird people who dress like us. Also, as you search through lists of noses and beauty marks for your character, you might catch one of Microsoft's notorious streaming delays as you wait for all of your options to load. It's no deal breaker—really this was the only time during the review I actually noticed it—but it can be annoying. S And clothes…we need more. Lots more. There's no doubt that Microsoft will microtransaction these to death—in fact they're bringing in a whole avatar store —and that's fine. But there are 33 shirt options for men right now. That selection may sound like a lot until you realize that you cannot alter colors or designs in any way. Ever see that 90210 where Brenda and Kelly pick out the same dress to the dance? Well it's going to be even worse for Halo fans. Multiplayer Parties One of the biggest updates in NXE was multiplayer matching—under-the-hood adjustments that allow groups of friends to travel together from game to game with extreme convenience. Sounds good, but we were unable to test the feature because none of our friends have the new firmware. S Themes Yes, you can use your old themes on NXE. No, it's not quite the same. One wallpaper is used for a majority of your navigation (pretty much the whole time that you're within the main icon-based interface, which is why that Fable backdrop is in every photo of this review). Other wallpapers make their way into submenus, like the Games Library content, but those moments are few and far between. S Full Game Installs I began installing Fable II at 10:14pm and it finished by 10:25pm. I'm not sure that the game loaded any faster—maybe you could catch it with a stopwatch, but I couldn't with casual observation. S But I did notice that Fable's auto-guidance system reacted more quickly to my directional changes. Pop-ins may have been a little improved as well, though I was able to duplicate a few problems I experienced with the disc in. The biggest benefit was that the DVD didn't spin nonstop. In fact, it didn't spin at all. Since my test 360 has gone through two optical drives already, I was happy to have the option to lessen the wear and tear on my 360. Netflix Finally, we get to my favorite update of NXE. Gold subscribers with Netflix subscriptions can instantly stream movies and tv shows right to their consoles. S You download the Netflix app on your Xbox, which takes about a minute. Then you go online with a 5-digit activation code, which takes about another minute. Add movies to your queue on netflix.com, and they appear on your Xbox in 1 to 5 seconds presented in sharp and vivid box art. (Even though you build a playlist on a PC, you can still check out queued movie ratings and summaries on the 360.) S That's, what, three minutes of setup time? To begin streaming any film in your queue, it's just another 10 seconds. Testing clips, video automatically formatted to our widescreen television. Of course, the determined by your bandwidth—it should look just like the quality in the $100 Roku box that's been available for some time. But as long as you have 2Mbps or faster downstream, you should have a positive experience. The picture is softer than DVD but sharper than Amazon Unbox. The only thing that bothers me is the noticeably lower frame rate than either. Still...I'm not looking this gift horse in the mouth. It's very watchable, and free (with subscription). S Fast forwarding brings you to a screen with 10 or so stills that you can cycle through to pick your spot of choice. You can quit watching a film and then resume it later with no problem. S All in all, it's a fantastic interface that makes for a trouble-free user experience. Microsoft nailed it. And we feel bad for Roku. They made a great product, and in one step, Microsoft made it pretty much obsolete. UPDATE: Especially because NXE will debut Netflix HD streaming . At the End of the Day Ultimately, it doesn't matter whether or not you like NXE, since we're all going to be forced to update the firmware to connect to Xbox Live. But luckily, NXE is an all-around upgrade from the old 360 OS—which really wasn't so bad in its own right. NXE is faster, prettier and more functional than its predecessor. It brings us avatars and Netflix, full game installs and more robust multiplayer. Truth be told, we could have been shown NXE as the operating system behind the Xbox 720, and life wouldn't have been so bad. Instead, we get it a few years early. And we consider ourselves lucky.