[UPDATE: It appears that the problems with the update and Xbox Live Marketplace have been corrected as of about 11:30 Central Time this morning.]
The latest Xbox 360 System Update appears to be causing major problems for gamers today. Speaking from personal experience, the update appears to be completely breaking Xbox Live for some users.
The symptom is that your console will say that Xbox Live requires an update, then you’ll try to run the update and after several minutes, the update fails. It then provides advice that you need to test your connection, which eventually tells you that you need an Xbox Live update to complete the tests. I even went as far as reformatting the hard drive on my 360 to make sure there wasn’t some corrupted data on there.
A number of users over on Major Nelson’s site are also reporting similar problems this morning. Microsoft hasn’t provided any information yet on when a fix might be available. I even sat on the 1-800-4MY-XBOX line for about 90 minutes earlier this morning to see if they could provide any insight, but eventually got disconnected and gave up.
…and I thought I’d be checking out that new Stranglehold demo tonight. Oh well, hopefully someone in Redmond is listening.