My impression: WAY overhyped.
First the interface. It's like a strange hybrid of the Zune, the PS3 cross media bar, and Vista's 3D Flip, none of which are good interfaces, IMO. The old interface needed some work, but this update isn't better. It does appear to be higher resolution (which is nice), but it looks like the driving force behind the interface was a way to jam more ads on the screen (and make them visible all at once).
The "avatars" are complete Mii ripoffs, but you get so many more options on the Wii. On the Wii, you can space the eyes, move the nose up and down, tilt eyebrows or move them, etc. There are so many more combinations and possibilities. You'd think since they were copying they'd at least make them better. Well, Microsoft did give them arms and legs
Netflix streaming is cool, but i think it's stupid that you have to add them to your watch instantly queue on the computer before they show up. Why not be able to browse and add them via the Xbox directly?
The Friends list also could have been much better. The avatars for your friends stand in front of different objects. At first i thought they represented the game they were playing as i saw a guitar and mic (i thought my friend was playing GH or Rock Band), but it appears to be random as that's not the game in his drive or even in his recent play list. And if they're offline they hang their head and sleep.
I'd have been much happier adding Netflix to the old interface with an increase in resolution.