If you've tried signing into Xbox LIVE between Wednesday morning and now, then you've seen the mandatory update prompt. Major Nelson explained in a previous blog post that all the update really does is reimplement the 'boot to disc' option, which was accidentally removed back in November. Most people wouldn't even notice the change, he said.
But some users did notice the size of the update was unusually large, if the 'boot to disc' option was all it changed. Then, Call of Duty players began suffering issues when returning to Modern Warfare 2 and Black Ops post-update. Currently, CoD pirates are noticing their scores have been frozen, so it's only a matter of time before the banhammer falls upon their heads. Similar problems have also been reported for Halo: Reach, but if you're unaffected, then enjoy the new-but-not-really 'boot to disc' function.
This wouldn't be the first "Trojan Horse" update coming out of Microsoft; the Kinect update released last November included an AP 2.5 checker that detected certain pirated games.