The New Xbox Experience will be mandatory for new games. Users are going to be required to update their 360s and install the NXE from the game DVD before enjoying the game itself. Apparently, the first games with this type of setup are H.A.W.X and MLB 2K9.

With the New Xbox Experience Xbox 360 owners will enjoy the following:

• Entertainment without limits. Xbox 360 invites you into a limitless world where the best games, movies and TV shows live side by side with your personal pictures and music library, and ready to share your fun anytime with friends across the globe through Xbox LIVE.
• Xbox LIVE Party. Xbox 360 allows you to create a virtual party on your TV with up to seven friends. With LIVE Party, voice chat while you play games, share photos in real time and entertain friends all over the world.
• Personality plus. Create a customizable, animated avatar and literally jump into the world of Xbox LIVE. Your avatar is your game-face throughout the New Xbox Experience and represents your personality -- whether you are a LIVE Party host or chatting with a friend. With custom avatars created by the more than 14 million members worldwide, Xbox LIVE will have as many avatars as Tokyo has residents.
• On-demand entertainment. Xbox 360 is home to the best TV and movie entertainment, including more than 12,000 exclusive films and TV episodes from Netflix Inc., and a large online library of on-demand high-definition TV shows and movies from partners such as Constantin, Disney, MGM, NBC Universal Inc. and Warner Bros. Entertainment Inc.
• Games for the community, by the community. For the first time in the history of console gaming, thousands of games developed by the creative community will be available to the public. The Community Games channel on Xbox LIVE will include games made by students, hobbyists, and average people all around the world and will be exclusive to Xbox LIVE.

Not sure if this is good or bad.