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.

Yep, thats about it, the bolded are what are expected to be with 2.40.

Also sony might announce a video dl service this e3.

why is live better?

you can chat a lot easier with friends - on live or on msn messenger

you can download videos - they have free ones you can snag too (I got Voltron)

with gold, you get content first - like at e3, when they announce something, you can go on live and snag it.

there's this new feature that is like a newsletter. it highlights new content, major nelson's minute, spotlights live members and other things.

the interface - blades - is much, much easier to navigate.

the chatpad works well if you have smaller hands

you can download full xbox games - and the indie developer content is unreal. you can also download demos of all xbox live games - not necessarily retail game demos, but xbox live games. you can try it and decide if you want to buy it.

you can also buy points online without using your credit card

is it perfect? no. but it is pretty cool and easy to navigate.

Sony has not picked up custom soundtracks yet? They really ought to do that.

Because PSN has barely no lag, because of dedicated servers.

please no one respond to this...

Edit: why do I even try.... (shakes head)

Wow, someone being specific!!!!! thanks!

thanks man.

see people? it actually isn't that difficult to be specific... Xbox 360 owners: anything they missed?

Edit:

you mean XBL cards? or is there some other way you can do it?

• Every game supports achievements / gamerscore
• Ingame Messages every time
• Video Chat
• tons of demos, trailers, themes etc
• great Video on Demand - service
• You can download music-videos
• You can connect the Xbox to a windows media center-PC
• Friendslists
• Xbox Live Arcade is awesome
• VERY easy to handle
• The way the multiplayer in halo3 works is great. You can upload screenshots, videos or self-created game-modes to bungie.net, other users can click them and they will be downloaded automatically as soon as you start your Halo3 again. This was very impressive to me
• You can chat with a mate even if he is playing a totally different game.
• I am sure, there are some more things to mention :D

http://www.xbox.com/en-US/marketplace/catalog.aspx?h=0&r=-1&g=-1&sb=1&s=-1&mt=1&p=4

Here are the movies you can download via Xbox Live.

Xbox Live is really well done. Don't let you tell different. [This does not mean, PSN is bad!]

Telling the truth is trolling? *sigh*

I realize, but for the sake of this question, I think it'd be simpler to ignore them. (and I was attempting to prevent a flame war from starting as that can be is a fanboy flashpoint.)