While the internet continues to decimate conventional demarcations like "countries" or "continents," content owners still find themselves funneled into separate geographical compartments. As an Xbox Live user, you are encouraged to keep your arms, legs and credit cards on the inside at all times, lest you cause some sort of international incident. The Xbox 360's Spring (that's Autumn for those on the other half of the planet!) dashboard update will further enforce this by restricting downloads based on the location of your console.
As Microsoft's John Porcaro explains it on the Gamerscore Blog, "if you have set up an account that does not match the country where you are located, you will find that these new security measures will only allow you to purchase and download content that is licensed in the country where you are located." Frequently, said country will not go by the name of "America," as the wealth of content available to US subscribers utterly dwarfs that found in other regions, including Europe. There's a reason people are taking their Xbox Live accounts on international trips.
While this primarily concerns content such as television shows and movies (which often hit Xbox Live before they've even been advertised in other countries), the decision to "strengthen the territory controls" seems exclusionary when more effort could be made to spread the content on a supposedly global network. The spider's web of licensing and regulation within television makes the delay and segregation somewhat understandable, but the possibility of Xbox Live Arcade games becoming similarly entangled is worrisome. Gamers in countries where the Xbox 360 has launched sans "official" Live support are already being foiled in their attempts just to purchase MS points. Your plastic's no good -- oh, except when it comes time to renew that Gold subscription. Then those borders fall down like dominoes.