This is fantasic, I'm getting excited
Me and friend of mine from work already have the wheels turning for an awesome XBLA type game
Anyone who complains about the price is an idiot, console development has been untouchable to garage devs since the 2600 days, and getting worse with every generation. The buy in for most consoles today is in the 100K range. Something that costs a piddaly $99 a year is a god-send to anyone SERIOUSLY interested in trying their hand at making a console application. The point of this is NOT to distribute these homebrew apps to the masses or to somehow help us with creating an exploit, it's to give indy game developers something where they can test their skills in a console environment.
As someone who knows a few indy game devleopers, even buying a cheap game engine will cost you a few grand, if you can't do graphics and need to commision that work, that will be a few more grand... $99 a year for what's essentially a software license is chump change even in the indy world. The only people who the $99 is too much are people who are only really interested in running stuff that other people made and not really interested in running anything themselves. This is a development environment pure and simple, it's not ment for joe gamer. Chances are if you're an indy gamer using the 360 as a testbed, you're not spending money on games and accessories so the $99 covers that cost in the eyes of MS. It's more then reasonable IMO.
For the most part you'll want to get your game (or application) up and running on the PC for starters and once you've got most of the bugs worked out buy your Xbox 360 license and make sure it works in that space as well.
I am quoting this post by "twistedsymphony" because it is worth re-reading as he describes perfectly MS's purpose in releasing these XNA development tools...even though we will be continued to be plagued by those kids asking if they have to pay $99 a year to have homebrew to "mod" their 360...I wish I knew more about coding, these tools could be fun...however it has been too many years since I was doing any coding, and then it was mostly in FORTRAN...