I just downloaded the new Xbox Live update, and it brings some significant updates. Most important for me are the ability to stream Netflix on demand movies through the Xbox 360 to a TV and the ability to copy games to the hard drive for faster loading times. Unfortunately, it doesn’t seem like there’s a way to browse and add movies from Netflix on the console. You need to add movies to your watch instantly queue using your Netflix account on a computer.
As for playing games from the hard drive, a limiting factor is that my hard drive is only large enough to hold one game. Therefore, I’m looking into ways to upgrade. If you have a desktop PC that supports SATA hard drives, it looks to be a pretty easy job. Full instructions are available at PC World.