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Well, basically:

- Cross game invites
- Cross game private chatting
- More content
- Better features in games (CoD4, for example has dedicated leaderboard servers, so your friends don't have to be online to see their stats).
- More leaderboards (CoD4 on 360 has leaderboards for the Arcade mode, for example).
- The ability to see exactly what gametypes and maps people are playing (You can go over a friend in your friendslist and it will say "Call of Duty 4: Modern Warfare Headquaters on Shipment")
- Cross game messaging
- Universal friends lists
- More DLC
- Achievements
- Player zones
- MSN Messenger support
- Headset standard with Premium and Elite consoles.
- Custom soundtracks.