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Euphoria14 said:

They mention that it works for any console with your profile on it. 

 

I don't think this is directly related to the game sharing feature.

The twitter pic is talking about both simultaneously, well the Xbox person is.

To me this is all very clear.

1) For a SINGLE CONSOLE, all users on that console can share the same Live account and thus the same game library.
NOTE: This is identical to having a normal DRM free disc game.

2) For MULTIPLE CONSOLES, a user can select up to 10 other individuals to share the games. Only restriction is a single game can only be played by a single person at a time. So you can play multiplayer with one of those 10 users unless they also had a copy of the game on their own.
NOTE: This is identical to having a normal DRM free disc game.

What MS is doing is simply adding the advantage of a digital system to the physical limitation of a disc. Its no different.

However on option #2 you have some interesting leeway since you can have say 2 of 10 buy a game like COD and then any 2 members of that group can do the mutiplayer too by simply using each other's copies. So you can create a sharing group and maybe rotate responsibilities with games that satisfy's the whole group.

Of course you could always be doing that same thing with a local group so its not like there is much difference beyond having to had eachother the game.