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Microsoft has just updated the Xbox LIVE Dashboard software for the Xbox 360. This update was released on December 6, 2011 around 4:00 PM PST. The completely changed the user's browsing experience.

This update is free to all Xbox 360 console owners and includes:

• New personal and social features including Cloud Storage for Game Saves and LIVE Profile
• Beacons and Facebook Sharing
• Enhanced Family Settings
• Integrated voice and gesture controls across the dashboard and in apps
• Bing voice search (Available this year in the US, UK and CA)

Also new, customized applications for television, movies, internet videos, sports and music have rolle out from world-leading providers in more than 20 countries.

Everything sounds great, right? Not really. In the latest Terms of Service ("TOS"), Microsoft added a nifty little eye-opening clause. We know you didn't really read it or will not read it when you update your system so we'll summarize for you:

IF YOU LIVE IN THE UNITED STATES, YOU AND MICROSOFT AGREE THAT IF YOU AND MICROSOFT DO NOT RESOLVE ANY DISPUTE BY INFORMAL NEGOTIATION UNDER SECTION 18.1.2 ABOVE, ANY EFFORT TO RESOLVE THE DISPUTE WILL BE CONDUCTED EXCLUSIVELY BY BINDING ARBITRATION IN ACCORDANCE WITH THE ARBITRATION PROCEDURES IN SECTION 18.1.7 BELOW. YOU UNDERSTAND AND ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION, YOU ARE GIVING UP THE RIGHT TO LITIGATE (OR PARTICIPATE IN AS A PARTY OR CLASS MEMBER) ALL DISPUTES IN COURT BEFORE A JUDGE OR JURY. INSTEAD, YOU UNDERSTAND AND AGREE THAT ALL DISPUTES WILL BE RESOLVED BEFORE A NEUTRAL ARBITRATOR, WHOSE AWARD (DECISION) WILL BE BINDING AND FINAL, EXCEPT FOR A LIMITED RIGHT OF APPEAL UNDER THE FEDERAL ARBITRATION ACT. ANY COURT WITH JURISDICTION OVER THE PARTIES MAY ENFORCE THE ARBITRATOR’S AWARD.

THE ONLY DISPUTES NOT COVERED BY THE AGREEMENT IN SECTION 18.1 TO NEGOTIATE INFORMALLY AND ARBITRATE ARE DISPUTES ENFORCING, PROTECTING, OR CONCERNING THE VALIDITY OF ANY OF YOUR OR MICROSOFT’S (OR ANY OF YOUR OR MICROSOFT’S LICENSORS’) INTELLECTUAL PROPERTY RIGHTS.

and don't forget…

18.1.6. CLASS ACTION WAIVER. YOU AND MICROSOFT AGREE THAT ANY PROCEED-Yoink!-INGS TO RESOLVE OR LITIGATE ANY DISPUTE, WHETHER IN ARBITRATION, IN COURT, OR OTHERWISE, WILL BE CONDUCTED SOLELY ON AN INDIVIDUAL BASIS, AND THAT NEITHER YOU NOR MICROSOFT WILL SEEK TO HAVE ANY DISPUTE HEARD AS A CLASS ACTION, A REPRESENTATIVE ACTION, A COLLECTIVE ACTION, A PRIVATE ATTORNEY-GENERAL ACTION, OR IN ANY PROCEEDING IN WHICH YOU OR MICROSOFT ACTS OR PROPOSES TO ACT IN A REPRESENTATIVE CAPACITY. YOU AND MICROSOFT FURTHER AGREE THAT NO ARBITRATION OR PROCEEDING WILL BE JOINED, CONSOLIDATED, OR COMBINED WITH ANOTHER ARBITRATION OR PROCEEDING WITHOUT THE PRIOR WRITTEN CONSENT OF YOU, MICROSOFT, AND ALL PARTIES TO ANY SUCH ARBITRATION OR PROCEEDING.

So basically both of those clauses protect Microsoft from being sued should you desire to take them to court over Xbox Live or your Xbox 360 console. Instead of going to court, any dispute will be handled by private arbitration. These arbitrations keep these disputes out of the public eye, which really only benefits Microsoft. In other words, you might get a bribe to keep quiet.

It's worth mentioning that there are many States which provide their citizens with rights to take legal action, so you might want to check your State before accepting Microsoft’s TOS.

This is clearly not what you wanted to hear before starting your Xbox 360 dashboard download but it is worth knowing about it.

What are your thoughts on this new Xbox 360 software update?