Micosoft them selves says about updating:
You don’t have to do anything, really. The update will download just like a normal system update would. You will see a status bar letting you know how long it will take, and you won’t be able to use the console during this time. Once the update finishes the console will reload into the welcome page, and you will be able to begin exploring the new features and experiences on Xbox 360.
New features
The update will also expand on the Live Party system, where up to eight players can link up over an online connection to play games and voice chat, or even watch a Netflix movie. Voice chat now works across different movies and games in each party. Not only that, but Live Party will be compatible with the entire gaming library.
We are all excited about those new features but I would bet that the downloads are going to be slow tonight with millions of Xbox consoles waiting for their update.
