After just downloading and browsing through it, the update looks pretty damn good. Finally after years you can do private chat groups online of up to 8 people through a xbox.
The avatar system is essentially copying the miis but at least you can choose what they wear as well, and there does seem to be more options of customisation available. I was expecting to be alot of lag between pages since everyone is downloading it, but its running very smoothly, and much faster than the old dashboard.
Being able to download stuff off the marketplace while in a game is a very handy feature, and this can also be done while on the xbox website, perfect if your at work and have your 360 on at home and want to download that latest demo. They have also allowed people to add points to their balance on the website as well, which comes very handy indeed, as I found it a pain in the neck to change credit card details in the past.
From what I can tell you'll be able to use your avatar as your gamertag picture but it seems to be lagging right now, but mine should be up for the world to see soon!
Edit: or now!!!
Article by: William Stephen