Our pals at Joystiq just got word straight from the horse's mouth about the forthcoming Xbox 360 Dashboard update, and have posted the deets along with lots of screenshots. The biggest -- and most expected -- news is background downloading, which includes a queue with six slots for all your Halo 3 trailer and pricey Oblivion horse needs. Downloads will pause while you play online to minimize lag, but otherwise will run in the background while you go about your Dashboard business. Other improvements include a boot to Dashboard function, improved media playback and controls, full USB keyboard support, and an improved Marketplace layout to handle the influx of available content. The update will be available to Xbox Live users "in about a week," and will be eventually be available bundled with retail game discs for those without an Internet enabled 360 (all four of you).

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Microsoft announces major 360 Dashboard update