A giant graphical shift is happening down in Xbox 360 dashboard land as users see that a new update is available for download. Microsoft is paving the way for their new motion tracking sensor system, implementing support for ESPN, and has even modified the way that people experience their own avatars.

Just the facts? We’ve got those from Wired.com this time,

The Zune Store is no longer limited to movies, as users with a Zune Pass subscription can browse the entire catalog straight from the console. There are plenty of ways to find new songs, including a Smart DJ option and social features.

A large number of the upgrades won’t be appreciated until Microsoft’s motion tracking sensor Kinect goes on sale. You’ll be able to navigate through much of the dashboard with dramatic arm movements, voice commands and waves, plus you’ll be able to video chat with other Kinect users.

The most fun I’ve had with this update happens to be the monstrous expansion of the avatar. Instead of big-head small-body Mii-like avatars, we’re being greeted by avatars of much more human proportions. The Wired article suggests that this is due to the roll-out of Kinect, allowing for better mapping of human-to-avatar movement when the motion sensing technology goes into effect.

We’ve heard reports that the ESPN interface is pretty fair, but not the best around. It’s another way to get to sports watching, but some critics say that you might not want to drop your usual HDtv subscriptions just for the Xbox 360 vision.

Amid other smaller updates seen including improved voice quality, better parental controls, and a superior on-screen keyboard.