Here is the complete list of updates for LIVE coming May 7th. In addition to the MSN Messenger integration the update will include support for H.264, MPEG4-4 and DRM Protected media such as the music you purchase/subscribe from MTV/URGE, Napster, Yahoo Music, etc (sorry NO ITUNES media). I have been waiting for DRM support for a while as I purchase and subscribe to a lot of music from MTV/URGE and some Napster (occasionally). I also like the fact that we will soon be able to see exactly what disk is in the 360 drive. I hate always having to remember which game I played last.. Updates are listed below..

• Beginning the week of May 7, users of Windows Live Messenger on Xbox 360 can text chat using the virtual keyboard accessible on Xbox 360, or by connecting a USB keyboard to the console. This summer Microsoft will launch a QWERTY text-input device, a new accessory that will connect directly into the Xbox 360 controller to support text and instant messaging.
  
  
• A richer Achievement notification pop-up will showcase the name of the unlocked Achievement and the gamerscore value without needing to leave the game to check the Achievements list.
  
  
• Enhanced family settings features for Xbox Live communications enable different defaults for video chat and voice chat.
  
  
• A new Xbox Live Marketplace blade lets Xbox Live members access the content they seek—whether it is game content or TV shows and movies (available in the United States)—from one place on Xbox Live.
  
  
• Updates to Xbox Live Arcade allow owners to quickly see which Xbox Live Arcade games their friends are playing and join in the fun.
  
  
• Xbox Live members can also compare progress of leaderboard scores and Achievements directly with all friends on their friends list. Expanded "Tell a Friend" capabilities make it easier than ever to boast about Achievements and high scores.
  
  
• Expanded "Tell a Friend" capabilities make it easier than ever to boast about Achievements and high scores.
  
  
• A new option in Auto Downloads provides faster access to the entire collection of free, trial-version Xbox Live Arcade games.
  
  
• New progressive download controls provide easy access to optimal viewing options by letting people fast-forward, rewind, pause and resume as their video is downloaded from Xbox Live Marketplace.
  
  
• Extension of the background download functionality will allow owners to set their Xbox 360 console to turn off automatically after downloads are complete.

• The name of game in tray is now displayed in the dashboard. When the user is in the dashboard and an Xbox 360 game is in the console then the name of the game is displayed in the tray icon of the dashboard.
  
  
• If the user highlights the tray icon then achievements and gamer score are displayed for that game based on the signed in user. Xbox1 games show the name and image of the game.
  
  
• Integrated support for the new Xbox 360 text input device. Note that this device includes a new wired headset.
  
  
• Playback progress bar indicates download completion.
  
  
• Switchable aspect ratio now available during video playback (Auto to Letterbox, Zoom, Stretch, Native).
  
  
• Player and friends lists now quickly show session presence information for quick identification of users that are joinable.
  
  
• Added H.264 video support: Up to 10 Mbps peak, Baseline, Main, and High profiles with 2 channel AAC LC.
  
  
• Added MPEG-4 Part 2 video support: Up to 5 Mbps peak, Simple Profile with 2 channel AAC LC.
  
  
• Show folder hierarchy for video content played from all devices.
  
  
• Bookmarks are stored for each video that the user plays remembering the users last location in the file as well as the aspect ratio that the user choose for that file.
  
  
• Video trick modes (fast forward, rewind, chapter skip) can now be used while downloading Video Marketplace content.
  
  
• Skip forward and backward functionality has been improved to skip to the next or previous chapter. Each video is divided into 10 “chapters” allowing you to quickly skip around video content.
  
  
• The information bar that is turned on via the On Screen Display (OSD) now shows you exactly where you are in the playback of the video file. In addition it will also show for Video Marketplace content how much of the file has been downloaded and where the “chapters” exist in the file.
  
  
• Windows Media protected content (WM-DRM) can now be streamed from the PC to the console. If the WM-DRM license is missing or corrupted then a specific error message is displayed to the user. Bookmarking is also stored for protected content.
  
  
• When a user selects an item for download from Marketplace then the system will determine if there is sufficient disk space for the item and, if not, will ask the user to delete content on the HDD. The system provides a sorted by size list of videos, game trailers, demos and arcade content to aid the user in the deletion process. The same list of items are also available from within memory so that users can quickly see which items are consuming the most disk space.
  
  
• The console will block the user who attempts to download content onto a storage device that will never have the capacity to store the item without deducting any points associated with the content item.
  
  
• The screensaver is disabled when playing photos from any source

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