Also, XBox is the leader in online console gaming. The 360 is being designed not only for hardcore gaming but for casual gaming by otherwise non-gamers, too. There will be two levels of online service, silver and gold. The silver tier is free and will let you play some classic board games (like checkers) with other online players, and game demos. The gold tier is subscription and lets you play online multiplayer, buy stuff, and lots of other things.
Of course, good games will come too, it's just a matter of time. A few well respected Japanese developers signed up, a way for MS to insert themselves more strategically into the Asian market.
This Gamespy article should give you a good idea of the 360's online amenities.