Microsoft is prepping a Xbox 360 firmware update that start going out tomorrow which updates the system's disc format, but the company is warning gamers that there may be a few bumps in the road. "Following a recent update to our system software," says Microsoft, "we have become aware of an issue that is preventing a very small number of Xbox 360 owners from playing retail game discs. This issue manifests itself as a unique 'disc unreadable' or 'disc unsupported' error on the screen. We are also able to detect this issue over Xbox Live and are proactively reaching out to customers that may be impacted to replace their console." Microsoft is reportedly offering to give afflicted gamers a 250GB slim 360 along with a year's membership to Live. The disc format update plans to increase the storage space on DVDs used by the system by 1GB.
Source...http://www.gameinformer.com/b/news/archive/2011/05/18/microsoft-replacing-360s-incompatible-with-new-firmware.aspx Microsoft confirms 360 replacements....http://xbox-360.nowgamer.com/news/5842/xbox-disc-update-ms-will-replace-affected-360s