XNA Game Studio Express
From what I've heard there will be a way to distribute your games later over live. Wonder how they will do it though, since there could be potentially thousands of games and weird demos.
The best would be if they could allow you to link a game to your profile and then simply people can download games from you that way. Makes it easier for people to find your game given a website. On the website you can just say who has the game. Now for games made by many people it would be cool if they then allowed you to link a game to many people and list them as the creators of a game. That would be kinda nice. The ability to write who did what would also be kinda nice...like "Artist" and "Programmer".
Now it would also be nice if people (like me) who don't have a 360 could release games aswell. Simply just compiled for xbox and let people do the testing (yikes!). It could work...