Here are the major points of the Xbox update, illustrated in gallery form. The update goes live to everyone August 11.
Game ratings. Instead of rating by using the D-Pad to scroll over, it has you press the A button multiple times to increase the star count. Kinda clumsy.
Community games are now called Indie games
Lots of weird titles that don't get a lot of coverage in here
Game saves now have timestamps on them so you can see when you saved them (for easier deletion)
The Avatar Marketplace, where you can pay money for clothes
Mixing and matching clothing from different games will be fun, like this pirate telescope from Monkey Island
Or this eyepatch (good for telescoping with)
Or this male-friendly outfit
320 points for this Halo RC Warthog. That's $4
The game "styles" so far
You'll get avatar rewards (shirts, props) by playing games
Fable 2's wardrobe