Ok mine just booted to dash using fewl's advise.Brother just brought over Halo 3 and I tried it and it worked the first time.Before that I tried it with Gears Of Wars but with no results.I dont know if its the games or just that I got lucky.But keep trying fewl's advise it wored for me.Thank You fewl and all who are still trying to figure out why this happens.
Turn on the 360, you will get the update failed screen.
1.Hold down the white button that scans for the controller, you will see the light spinning in circles, keep holding it.
2.Insert a game, in my case fewls used Bioshock.I used Halo 3,Someone else said it worked with NCAA 08
3.Turn off the 360 while still holding the white button.
4.Turn it back on while still holding the white button