This has the awesome written all over it.
For a company burdened with the reputation for crappy interfaces, they sure seem to know what they're doing!
Expect 20 million Xbox 360s sporting this interface by Q2 2009, so I hope the developers really get into this and give us a ton of content for our avatars.
But in any case, if this helps sell the 360 - we won't see anything of it really until next year.
Tease.