New motion controller

Kotaku - Microsoft Makes You The Motion Controller With Project Natal - Project Natal

Live! getting Last.FM streaming radio

Kotaku - Last.FM Coming To Xbox Live -

Live! getting Facebook and Twitter integration

Gizmodo - Facebook and Twitter Come to Xbox Live This Fall - E3

Live! Netflix getting the ability to add straight from the interface and the video store is being renamed the Zune store and getting 1080P streaming.

Gizmodo - Netflix Lets You Add to Queue on Xbox, Video Store Gets 1080p - Xbox 360

These are some great upgrades to the Live! service.