According to bit-tech.net the new update is meant more to thwart hacking than to fix bugs.
The bugfixes that are there are minor: better network connections for Dutch players, better accuracy when calculating last time played, more helpful error messages and as well as various unspecified 'improvements' to the Guide.
Going further, gamasutra.com is guessing that the real story behind the update was to seal a security flaw that was discovered via an unencrypted demo disk.
Not listed in the improvements is an alleged fix mentioned by a pseudonymous commenter on the weblog of Xbox Live director of programming Larry 'Major Nelson' Hryb: "The true purpose of this update was to halt the progress of the modding community. Their 'demo disk' doesn't work any more."
No matter what you think of this update, you're going to have to apply it sooner or later.