Just saw some gameplay footage of Murder Miners. That game looks awesome. Minecraft + Halo.
gameplay: http://www.youtube.com/watch?v=MRP06-kSAeE
That one is extremely funny (nerd rage): http://www.youtube.com/watch?v=FcYDJhHb-Jo
Also Penny Arcade's On the Rain-Slick Precipice of Darkness 3 is on the service (the first 2 games were on XBLA/PSN/Steam). Part 4 is coming as well.
Breath of Death VII and Cthulhu Saves the World are two famous XBL indie RPGs.
Many 2D zombie shooters such as I MAED A GAM3 W1TH Z0MBIES 1N IT!!!1 and Dead Pixels
Minecraft clones (but also expanding the idea) like CastleMiner Z, Total Miner Forge, Fortresscraft etc.
Lots of SHMUPS and more