If you do not get prompted about the update, try playing a game or doing a connection test with Xbox Live.

Latest update by Microsoft (via Twitter):

We are a go! The #XboxUpdate is currently on its way to all 35 million Xbox LIVE members around the world (1/2)

We apologize for today’s delay and hope that you will be thrilled with your new Xbox experience. #XboxUpdate (2/2)

Xbox Live Status

Tired of having to dual-wield your controller and Kinect to actively use the Xbox 360 dashboard? I think all of us Kinect users are, because Kinect provides a way of interacting with your Xbox in a way that is just so much easier than with a regular controller! Well you won’t have to wait any longer because tomorrow is the day that Kinect finally gets the dashboard integration it deserves…get ready for the Xbox 360 dashboard update!

Xbox 360 dashboard update

Looking at the screenshots of the new dashboard you might think it looks mighty familiar. And it does! Because this is just another reincarnation of Microsoft inter-product spanning Metro interface! The Metro interface is ‘block’ based and can also be found on Windows Phone 7 and upcoming Windows 8. But the look and feel is really not the significant part of the update…it is the way you interact with it!

Kinect and the new dashboard

The new dashboard can be entirely controlled with Kinect. In fact: Kinect is the preferred way of handling this new dashboard! Voice and gesture control make browsing through the vast content on your Xbox easier and faster than ever before! It’s intuitive and just feels like a natural thing to do!

There will be other features that launch with this new dashboard, such as saving both save game data and profile data to the cloud and the new beacon feature.

Windows 7 companion app

Another interesting thing (but less Kinect related), is that there will be a Windows Phone 7 companion app to go along with this dashboard update. The app will let you track friend activity and even search content directly on Xbox live. But the best thing is that the app will provide yet another way to use the new dashboard: Although not so awesome as with Kinect the app will allow you to use your Windows Phone as a remote control to control all your Xbox 360 media.

A personal message from Xbox Live’s Corporate VP

Microsoft is so proud of this massive Xbox update that Xbox Live’s Corporate VP Marc Whitten has posted an official letter in anticipation of tomorrow’s release! The letter can be found below:

Dear Xbox LIVE Members,

Today, we’re launching a new Xbox 360 experience that connects you with your favorite entertainment and games like never before and makes finding and enjoying entertainment as simple as it should be.

It’s a vision we shared at E3 and I’d like to thank you for all of your valuable feedback along this incredible ride and share a little more about what we have in store this holiday – from Beacons, cloud storage and Facebook sharing, to our latest entertainment offerings.

Building upon our great lineup of partners, we’ve teamed up with nearly 40 of the world’s leading TV & entertainment providers to bring you an array of live and on-demand TV, movies, games, sports and music experiences. The first wave of new partners rolls out today with experiences like EPIX and TODAY (MSNBC) in the US, LOVEFiLM in the UK, Sky Go in Germany, Premium Play by (MediaSet) in Italy and Telefonica España – Movistar Imagenio in Spain. And we’ll continue to roll out more entertainment content to Xbox LIVE in the coming months.

Beyond entertainment, you’ll find a number of features designed to make your Xbox experience more personal, social and effortless. The dashboard has an entirely new look and feel and a completely reimagined interface that makes your entertainment accessible through simple voice commands. Now, using voice search with Bing on Xbox, you can find and play the programming you want across multiple entertainment providers without having to search for a remote control. In the mood for ‘The Office?’ Just say “Xbox, Bing, ‘The Office,’” and Xbox will display all episodes available from various entertainment apps across the console.

We’re also bringing you Beacons and Facebook sharing, further integrating social into your Xbox experience. Before jumping into an episode of ‘The Office,’ you can activate a Beacon to let your friends know that you want to play, say, “Gears of War 3.” Then, sit back and relax with the Dunder Mifflin crew. The Beacon will let you know when a LIVE friend is available for a round of Horde in Gears. After the game, use Facebook Sharing to tout your achievements and showcase your in-game accomplishments through direct posts.

While we’re proud of our capability to connect you remotely to the global community of more tha
n 35 million Xbox LIVE members, sometimes there’s nothing like being with your friends and family. And so we’ve added cloud storage so you can access game saves and your LIVE profile, including achievements, from your friends’ consoles as well.

Lastly, with the ever-expanding library of content available, we realize Xbox is enjoyed by all members of the family. Rest assured that our parental controls have improved in parallel with this new content. Parents can manage their child’s console activity, sharing on social networking sites as well as regulate access to games, movies, television, and music. Additionally, the update brings enhanced navigation to Xbox 360 Family Settings to better integrate with Kinect.

We strive to continually innovate and bring meaningful experiences to each and every member of the Xbox LIVE community. Currently, our community is already enjoying 2.1 billion hours of entertainment each month. We imagine this number will only continue to grow as you discover enhanced entertainment on Xbox this holiday that is instantly searchable, easily discoverable and enjoyable in extraordinary new ways. We hope you enjoy this new chapter in the evolution of Xbox and continue to push us to write the next.