A new 360 update is out today. Download now. Engadget has some coverage here.
I found one problem with this update. I was playing a original xbox game, Grand Theft Auto: San Andreas. I found that your custom music still works when loading it (which is cool) but, the game guide still doesn't work for older games. This is a problem because the in game music interferes with the custom music and there is no way to turn your music off unless you quit the game.
The update went quick. I played with some of the new features, but have not yet discovered them all. I, like most, have found the setting to power up to dashboard rather than auto-boot the game in the tray, to be the most useful.