This month's Game Informer (Oct. 2006) has an article about a software that allows users to create their own video games.
Check out this site:
http://msdn.microsoft.com/directx/XNA/default.aspx
MS has put out the program as a free download. In the near future they plan on selling $99/year memberships that allow users to upload their created games to a special section in the 360 Arcade.
Hopefully we'll see something more than just generic crap with different pictures.
If anyone has experience using this software or plans on playing with it, please post here and discuss.
Thanks