Seems like Microsoft just did an oops, when a video of various release info was placed on the internet a little early. President of the Entertainment & Devices Division - Robbie Bach - discussed "Game Room" in the video, an interactive video game arcade your avatar can go into to play old retro arcade games. They also confirmed Natal will release this year. Expect more when the actual announcements go live at CES. We'll update this post then. In the meantime let's wonder if we'll be paying MS Points per play of these retro games (like inserting a quarter), or if once opened they'll remain unlocked every time you go into the arcade.
UPDATE: Game Room... "take a trip down memory lane. Your Xbox avatar enters your personal arcade." This Spring it will launch with 30 arcade classics. The ability to have a "showdown" in the arcade, where you can play against others. Looks like a great selection of old arcade hits, loads from Atari. When you buy the games you can play them on your Xbox and PC.
Other News: The Natural User Interface, or Project Natal, which will work with existing consoles release "this holiday season". Halo Reach releases this Fall.