It looks like Microsoft is giving the Xbox 360 a pretty major update tomorrow, June 6. They have a complete update list that is available for you to view and is very extensive. Surprising the new features list is pretty large but the system improvements section is about four-times that length!
This list will keep Xbox 360 owners busy for awhile.
Xbox 360 Update Homepage
News Source: Digg
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Xbox 360 Gets 125 Updates On 6/6/06