Microsoft just announced at E3 that they'll be giving the Xbox 360 a total software overhaul this fall. "When people turn on their Xbox 360s this fall, they'll get an entirely new interface and Dashboard, an entirely new Xbox through the magic of software," said John Schappert, head of Live services. New features will include those fancy new Mii-like 3D Avatars, a new emphasis on community with IM, video chat, and photo sharing, along with a brand new 3D slide interface for the main Dashboard screen. Avatars will be integrated into your GamerCard, but you can also create a "Live party" and invite your friends, with as many as 8 of your three dimensional homies hanging out at once -- though you're not hanging out in an actual 3D environment. You can use your avatar in certain Live Arcade games like Uno, and even in third party titles such as the upcoming Scene It? title. It sounds like Microsoft is taking cues from the Wii, Sony's Home and Facebook all in one fell swoop, not bad at all.