Yeah, I was talking to moojuice and Matt Young last night and mentioned that it seems like this update is more about adding stuff that your Xbox can do than the actual usefulness of it (unlike last year's Netflix update, which I still think added tremendous value to the system).
Everything in and of itself is pretty cool and well designed, but there's not a whole lot of application for it. You could tell someone "I can go on Facebook on my Xbox, and I can go on Twitter on my Xbox, and I can listen to Last.fm." But then they'd ask you "Why?" And you'd have to say "I don't know..." haha.
The only real usefulness for Last.fm is if you were having a party and just wanted to leave it running. Facebook...I guess maybe if you have a lot of your gaming friends on there, and you want to see what they've been up to...? Twitter...well, Twitter has always been a less involved form of Facebook, but without being able to view pictures or visit links, it loses a lot of its charm.
I guess this update makes the 360 feel like more of a robust, all-around media device by giving you things you can do BESIDES playing games. Just nothing you can do WHILE playing games. That's not a terrible thing, but it's not going to blow people away either.