The integration between online and the xbox interface is more tight, it’s much more usable, there’s more information before you buy a specific item on the marketplace and a bunch of new features making the experience very worthwhile.

You can now install games on the hard-drive, thus cutting down on loading times and making the Xbox run quieter.

The new avatars look cute but they don’t add much value yet, I guess it’s the natural response to PS3′s Home and the Wii’s interface with the Mii’s. So far there’s only two games that take advantage of the new avatars but I guess more will come in the future.

There’s also new “premium” themes which look impressive but cost more. I don’t understand why there isn’t an option to preview a theme yet but some nice folks have been taking photos and screenshots so you know what you’re buying beforehand.

G4TV also posted a nice preview video but if you have a Xbox 360 the best thing to do is just connect it to the web and update.

Gizmodo also has a great article: 10 things you should know about the new Xbox Live Experience.

The current dashboard although not being too bad, has a few problems which sucessive update haven’t fixed, such as  too much information on screen, a bit of lag, hard to navigate in so much content (you have videos, games, addons, music,etc) and some areas were simply over-complicated.

Old Xbox Layout:

New Layout below:

With this aproach I think Microsoft is going the “Apple way” and going for a more simple, less complicated but coese design. On the other hand, with Sony releasing it’s “Home” pseudo-Second Live world/dashboard and given the Wii’s success with the Mii’s, Microsoft felt the need to introduce some sort of Avatars into the console.

Joystiq has posted a video walkthrough of the new Dashboard and Xbox Focus has detailed information on the new features. Now it’s all about waiting for the next system-update and experience the new dashboard hands-on.