At E3 on Monday, Microsoft announced a deal with Netflix to enable Xbox 360 owners to instantly stream movies and TV episodes through their consoles. If you’re an Xbox LIVE Gold member with a current Netflix account, you don’t need to pay for anything extra. (SWEET! That’s me!)

“Watching movies at home will never be the same. Netflix on Xbox 360 is an entertainment first, and we are bringing friends together with the best in entertainment content like no other device in the living room,” said John Schappert, corporate vice president of Interactive Entertainment LIVE, Software and Services Business at Microsoft. “We are creating a completely new social entertainment experience, and Xbox 360 will be the only video game system where you can access your library of instantly streamable movies from Netflix and turn any room into a virtual movie theater.”

If you’ve ever tried to download a movie through Xbox LIVE and you managed not to kill yourself during the process, you know how much of a pain in the ass the current service can be. Through this new partnership, Xbox claims that the streaming movies and shows will begin playing within 30 seconds from selection and you can fast-forward, pause and rewind, all using either your Xbox 360 Controller or Media Remote. Plus, if you want to watch movies with your friends through LIVE, you’ll be able to use Live Party to create a room for 8 people to chat, share content and throw virtual popcorn at the screen.

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What happens when you combine the sleek PS3 dashboard interface with avatars from the Wii? The new Xbox dashboard revealed this week at E3. Check out the video:

I’m not sure how I feel about the avatars. I mean, I had fun with them on the Wii… but the Wii is supposed to be cutesy with family games and classics. I’m not sure what kind of mood it would set to see a doe eyed avatar before I play Gears of War II. But who knows… Microsoft could be onto something big here. Everyone gets sick of the Wii avatars about a month after they start messing with them. The trivia games, photo sharing, movie watching and chatting functionality are all things the Wii didn’t have. I’ve long been a supporter of the Xbox way and I believe that if anyone can do it right, they can.

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Some musicians scoff at Guitar Hero. Smart ones who want to make money, however, embrace the idea of having their songs can played on plastic guitars by a bunch of nerds.

We’ve seen Guitar Hero: Aerosmith. And we know there’s Guitar Hero: Metallica in the works. At E3, Red Octane’s Kai Huang announced that the new Metallica Album, Death Magnetic, will be available for download through Guitar Hero III and also on Guitar Hero: World Tour. This is supposed to happen in conjunction with the album release (rumored to be on September 17th.)

Wondering what sales will be like? Just take a look back to May when the new Motley Cr√ºe single, “Saints of Los Angeles,” sold more downloads on Rock Band than services like iTunes and Amazon. According to stats from their management, the track was downloaded 47,000 times via the Xbox 360 version of Rock Band within the first week it was available. Compare that number to the measly 10,000 downloads by fans content to rock out with air guitars. It seems the Rock Band/Guitar Hero world is becoming a new destination for popular bands trying to get fans to pay for their songs instead of ripping them illegally.

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