According to the XBox Linux Project web site, Microsoft's console connects to MS servers, downloads updates and installs them without even informing owners of what is happening.
When users connect to the XBox Live service, the console downloads the latest Dashboard software and installs it. Although the XBox Live agreement does warn of such updates, as do some games, there are two worrying issues raised by Microsoft's approach.
Firstly, the bug fixes downloaded do nothing else but block the possibility of Linux being installed (using current installation methods) on that particular unit. The second issue raised is that, according to XBox Linux Project, even if users are not subscribed to the service but have their console connected and select XBox Live, their console will still start downloading the updates.
Various sites have started mentioning the Computer Misuse Act. The Xbox Linux Project has even gone so far as to state that it considers this action unlawful at least in the EU, because the Xbox EULA, which would permit this, is void in the EU.
Other worries which should concern XBox users is that automatic downloads and installations of bug fixes carry the inherent risk of an error in the update which can have, potentially, catastrophic results. Finally there is always the thought in everyone's mind that XBox may be a testing ground for plans that Microsoft has for its other products, namely PC's.