Microsoft gave us a sneak peak of their upcoming Live update and it's choc full of new goodies for the console. However, quite a few of the announced updates didn't quite make it or are still works in progress. The company is handing out invites for the update, which should go live in beta form on this coming Monday. Apply here to become part of the lucky few. The update will be released on August 11th, so if you can't get in on the beta, you won't have to wait all that long.

　　If you want the short and skinny, the update will bring new features and revamp existing features in the following categories: Netflix, Avatar Marketplace, Games on Demand, User Ratings, Xbox Live Parties, and Video Display Options. Other minor changes include improvements to the achievement browser, achievement tracking, navigation, and friends list sorting.

　　Our experiences with the preview so far have been mixed, but that's to be expected, as it is in beta after all. Netflix took considerably longer to load, and we didn't see any queue management options. Terminator 2 allowed us to create a viewing party (which was really easy to do), but failed to start playback. That might also have to do with the fact that we had friends on out list that we didn't know, and were offline. We couldn't add any in-office friends as only one machine had the update at the time. Moving along, Die Hard had the party option grayed out entirely. We're guessing there are some licensing issues that need to be hammered out.

　　The Avatar Marketplace worked as advertised. There's a small selection of clothing and accessories you can root through at the moment, but that should expand considerably once the update is widely released. We outfitted our character in Halo 3 garb and steampunk goggles to round out the look. Items cost between 80 and 160 points to purchase, and an entire outfit might run you about 320 points. The Recessionista clothing pack in particular caught our attention. It wasn't so much the depression era garb, but the prices. You'd think budget clothing would actually be budget. To defray some of the cost, Microsoft will also enable Avatar awards of clothing and props within games, so you might just get some of the stuff for free.

　　As Microsoft stated, Games on Demand hasn't been released yet, but will be soon. Ratings for Live Arcade have been implemented on a five star scale, and a Top Rated menu tab lets you see the best that Live Arcade has to offer.

　　A full list of changes, taken from Microsoft's press release, follows:

　　Netflix Updates

　　-Movie Parties – Xbox LIVE Gold members can sit together in a virtual theater with up to seven friends no matter where they are while your Avatars watch a movie, flirt or even throw popcorn at each other.

　　-Manage Your Queue – Browse the Netflix Instant Watch video catalogue, choose from the most popular movies and genres and add to your queue all from the comfort of your couch – no computer required.

　　- Enhanced Playback Experience – Enjoy a smooth viewing experience when your internet bandwidth fluctuates.

　　- Friends Info – Richer information is now displayed in the Friends channel and in the Guide showing what you and your friends are doing.

　　Avatar Marketplace

　　- Clothing – Download premium items, including branded apparel from your favorite fashion labels and Xbox 360 games such as "Halo."

　　- Props – You can now equip your avatar with animated items they can carry around and interact with.

　　-Awardables – The ability to earn Avatar clothing and props as rewards within games has been added. Please stay tuned for an update on supporting titles.

　　Games on Demand

　　Please note that Games on Demand will be available in the preview beginning early August.

　　- Purchase Options – Browse and download a great selection of full Xbox 360 games using Microsoft Points, direct debit, or credit card.

　　- Game Manuals – Game manuals for Games on Demand titles can be viewed, downloaded or printed on Xbox.com.

　　- It's Yours Forever! – As with other Xbox LIVE content, Games on Demand titles are linked to your Xbox LIVE account, so you can delete and re-download anything you have already purchased to the same console or another console.

　　User Ratings

　　- Rate it – You can now rate every game on the Xbox LIVE Games Marketplace using a 5-star system.

　　- Sort and Find it – Now you can easily find the games that everyone's been raving about by visiting the Top Rated games in the Browse All category of Xbox LIVE Games Marketplace.

　　Xbox LIVE Parties

　　- Party Reconnections – If you are accidently disconnected from your party, Xbox LIVE will automatically reconnect you.

　　- Streamlined Party Invites – Invites are now just one click away! No need to click through multiple screens to get all your friends together.

　　Video Display Options

　　- Display Discovery – Make sure you can see and hear your entertainment in the highest resolution and sound quality possible with the option to override and select audio and video formats independent of the information your television sends to your Xbox 360 console.-

　　Other Improvements

　　- Gold Member Veterans – Xbox LIVE Gold members get to show it off with a stamp on your Gamer Card that tells people how long you've been a Gold member.

　　- Indie Games – Xbox LIVE Community Games has been renamed Xbox LIVE Indie Games. We feel this new name better represents the independent spirit of these titles.

　　- Achievement Browser – We've revamped the Achievements browser so it's now easier to read through all the achievements while playing a game. You can now also launch a game directly from the browser.

　　- Achievements Tracking – A new view inside the profile panel which includes a summary of Achievements earned across all the games played, and shows of all your completed games.

　　- Streamlined Navigation - Streamlined navigation, including new entry points in the dashboard for Active Downloads, redeeming codes, recovering Gamertags and more.

　　- Voice Messages – No more blank voice messages! When recording a voice message, a warning will pop up if no audio is detected.

　　- Friends List Sorting – It's now easier to find your friends! Find and sort your friends by activity, Gamertag or online status by pressing the Y button while viewing the friends list in the Guide.

　　- Memory – Time stamps now appear in the memory area, which particular handy when managing saved games.

　　Account Management

　　- Subscription Notification – If your Xbox LIVE subscription is about to run out, you will now be notified when you sign into Xbox LIVE.

　　- Updates for Invalid Windows Live IDs – If the Windows Live ID you provided has expired, you will now be prompted to update it the next time you sign into Xbox LIVE.

　　- Account recovery – We've enhanced the account recovery process to make it faster and more reliable.

　　What does this Xbox LIVE Update not include?

　　The following features will be coming in future Xbox LIVE updates, which we'll be sure to let you know about.

　　- Facebook, Twitter, Zune video and 1080p Instant On, Last.fm