the latest Xbox Engineering blog post gets down and dirty with the actual software and hardware behind the Xbox Live Achievements system, and not only how your Xbox actually learns from whatever game you're playing that you just earned some points, but how you friends get to know it as well.
Turns out the sound we most connect with the whole system (that "Achievement Unlocked" beep) was an afterthought -- originally, Microsoft's team wasn't planning on having any notification of point scoring at all. The idea of achievements has evolved over time as well -- they did start out with the 5-50 and 1000 Gamerscore requirements, but since launch, devs have better learned how to use Achievements and how to customize them. Apparently there's a whole bunch of code and science behind the whole thing. Go figure! We always thought it was unicorn magic of some kind.