The service will go into beta later this month, but Joystiq got a hands on with it recently.
I found this disappointing:
If you do have a Zune, you'll benefit from the corporate synergy, being able to transfer Zune video purchases from the Xbox to the portable. (Rentals will not work though, unlike the PlayStation Store's connectivity between PS3 and PSP.) If you don't have a Zune, the new Marketplace still has one huge improvement over the original service: streaming 1080p video.
The bolded part really irks me. That's a functionality that I was really hoping for. Oh well, hopefully this update fixes the issues that I currently have with Xbox 360 DRM on video pruchases.