Earlier today I posted an article suggesting that there were no obvious major problems with the new dashboard update for Xbox 360, however since this article was posted we have received a huge response from people reporting connection problems.
The most common problem seems to occur when people begin downloading the update, apparently a lot of people start downloading the update, however after a few minutes it fails and says that there is a connection problem.
There has been no official statement from Microsoft, however I suspect that this is a server-related problem caused by the huge demand, some users have tried installing the update multiples times and it still fails, whilst others suggested it worked after a few attempts.
My suggestion is to turn off your router for 5 minutes and retry the update, the update worked fine for me 9 hours ago when there wasn’t as much demand, so it should be a problem which resolves over time.
Have you experienced the connection problems? If so, what did you do to resolve this?
Also See: Xbox Live down, Friends List not working