Got your attention yet?
Good!
If you are going to install the new Xbox live it is a very good idea to do the following.
1 - Before you install the new Update disk, backup C: again
2 - Rename the default dashboard back to xboxdash.xbe and reboot.
Check that it works.
3 - With the original dashboard, working insert or boot the new Xboxlive disk.
4 - After the update, turn off the machine and backup C: yet again to another folder.
5 - Now boot the Evolution-X dash from a CD and rename the files back to how you had them.
Now here is the important part.
Unless you have backed up C:\ like I said above, under no circumstance reboot the XboxLive update disk with the games on it!
LET ME REPEAT.
DO NOT let the Xbox Live disk boot up in your machine again!
If you do it will NUKE the MS Xbox Live dash after producing a cryptic not able to update error.
Even if you rename the MS dashboard back it back it will no longer work.
YOUR only recourse is to restore from a backup of your ENTIRE C:\ partition.
I've tried this several times with identical results.
If you want to play the games on the CD, YOU MUST copy the individual games to the hard drive and run them from there. You must not copy over the top level default.xbe file which will recreate the problem again!
The new Xbox Live games which are now out also attempt to perform an update if you accidentally or purposely hit "New Account". This creates exactly the same situation.
An friend, compatriot, sibling or relative make do you the favor of nuking your machine.
Note: If you have a flash upgradeable mod, switch to a ybox dash mod or an EvoX one.
These mod chips invoke a file called yboxdash.xbe instead of xboxdash.xbe.
In turn this means that you can leave the updated xboxdash.xbe as is, using it's proper name. Doing this prevents the "nuking" as the updaters merely see what they are expecting.
However if you have an older machine it is very important that you avoid letting any "updaters" run, including the Xbox Live setup disk or anyone accidentally hit the "New Account" entry on Live enabled games.
PLEASE, PLEASE, PLEASE backup your C: & E: partitions before and after the updates just to be sure that you have everything SAFE!