Microsoft is preparing their consoles to take a new disk format. This can mean great things for the 360. More space on a disk would be great. This could prevent more 3 DVD games from being released. Probably what Microsoft did not expect was to brick a small number (whatever that actually means) of their player base. Microsoft has even said "Following a recent update to our system software, we have become aware of an issue that is preventing a very small number of Xbox 360 owners from playing retail game discs".
But they are willing to make up for this to the people it happens to. Eurogamer has stated that if you have the issue to contact Xbox support at www.xbox.com/support/contact to verify it has happened. Once they have verified the issue then you can be your system replaced with a nice shiny Xbox 360 S complete with a 250 GB hard dive. Not too shabby.