I don't use my Xbox 360 to watch (or stream) video, so I missed this, but it seems the recent "Metro" dashboard update made a mess of high-definition video playback — specifically anything running at the tip-top resolution, 1080p.
No, game playback's not affected, so no need to get those particular undergarments in a twist, but Digital Foundry recently drew attention to the alleged bug, claiming it "saw video playback washed out, emphasizing compression artifacts and lowering image quality compared to the previous, perfectly serviceable video player."
The site further claims Microsoft "appeared to be ignoring the feedback of its beta testers to the point of deleting reports of the issue, causing dismay from those who put their time and effort into road-testing the new update."
Ignorant no more: Microsoft programming director Larry Hryb wrote on Twitter last night: "We're aware of the colorspace issue w/ some Xbox video apps & are working on a fix. No ETA yet but we hope to have an update soon."
While DF independently confirmed game playback — specifically color levels — is A-OK if you're running the Xbox 360 "Metro" update, the site found that "[video] calibration tools put together by the AVSForum demonstrate conclusively that, while the Xbox 360 has no problem whatsoever decoding 1080p video, it is no longer being rendered in native resolution." Translation: The new dash is downsampling 1080p videos to 720p. How that slipped by quality control, given reports beta testers were complaining about it well before the update rolled out, is anyone's guess.
Also: Engadget adds that some are complaining there's a problem with HDCP authentication (High-bandwidth Digital Content Protection via HDMI cables), too.