A new video floating around the web today brings us news of an update to Xbox 360, including integration with Windows Live Messenger, allowing Messenger conversations from within Xbox, the ability to see what game a Messenger contact is playing, and to invite and join a game from Messenger within Xbox.

While there is no clear confirmation that the video is legitimate, it certainly doesn't appear to be fake.  There's quite a discussion going on at Engadget, where Ryan Block posted the video and detailed the changes mentioned:

• The update hits May 7th
• Your contact list will now integrate Windows Live Messenger, and show joinable session status
• Messenger contacts can see what game you're playing, and your gamertag
• Marketplace will now have its own blade, which will be skinned independent of your theme
• Users will now get inline achievement updates
• Low-power download mode and auto-shutdown
• You can watch partially downloaded movies
• You can text chat messenger six friends playing games watching movies
• Multiple tweaks on the user interface