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The spring update is expected to be released to all Xbox Live users “in about a week” and will be followed up with a fall update, as part of their plan to release two major updates each year. This huge upgrade includes:

• New Media and Entertainment Menu - The upgrade has focused content into groups. The popular iPod AAC plugin has also been placed “near the top” to streamline that process.
• Games Menu - The Games screen now has a “Newly Released” section, so new additions to the Xbox Live Arcade, or new game demos, can be quickly located and downloaded.
• View Active Downloads - Background downloading. As detailed earlier, you’ll have a queue…with up to six download slots available. You’ll be able to use the console as usual while downloading; if you take a game online, the downloads will pause until you’re done.
• Downloads are Easier to Find - Trailers has become Game Videos. In addition, you’ll be presented with options upon completion of a download: play now, apply theme now, etc.

• Fast Forward/Rewind All Downloaded Marketplace Videos (2X-16X) - Simply play/pause functionality when playing back downloaded clips was another major annoyance. Glad to see this has been added, even if this sort of functionality is really basic.
• Music Player & DVD Playback Improvements - Although the CD player previously queried the internet to populate artist/track information, this functionality has been improved. The major enhancement is that the custom music you’re playing—whether from an iPod, CD, HDD, or network share—will stay consistent as you switch from one console function to the next. No more tracking down the playlist you were listening to and starting over. The DVD player also supports bookmarking now; if you’re watching a movie and receive an invite from a friend, you can replace the movie disc with a game and return to the same spot in the movie when you resume it.
• General Usability Enhancements - Similar to an instant messaging client, you’ll be able to set your status as away (red) when your console has been inactive for a certain period of time (15 minutes). There will also be “full” USB keyboard support.
• New Startup Feature - Launches Direct to Dashboard - Another major feature request, especially those that use their console as a media center extender. Instead of automatically booting into whatever game is loaded in the drive, you’ll be able to set your console to boot into the Dashboard by default.

Read [Joystiq]