I got back from Microsoft's London office a couple hours ago where they demonstrated the new "XBox Live Experience", XBox Live Primetime, the advertising opportunities within it and then some hands on time with upcoming karaoke game "LIPS".
In terms of the new dashboard or "The New XBox Experience" there isn't much to cover that wasn't already said at E3. The avatars animate really nicely and the general artistic style chosen by Rare sits well with me. From what I saw there are a lot of customisation options and yes, It sounds like in the future you will be able to deck your avatar out in branded clothing and accessories. Whether this is free as advertisers try this as a method of advertising clothing brands or whether they'll try and create a virtual fashion market where users pay for premium brand clothes remains to be seen. The impression I got was that Microsoft themselves still need to hash these details out.
In terms of the UI I've come to like it. On the whole. It's fairly straightforward as you just scroll between the various screens in the now obligatory shiny gradient backgrounds to access your games, music and video content. On the whole it seems better for browsing if you don't have a clear idea of what content you are looking for. If you wish however you can access the old school blade system as an overlay to quickly navigate to a specific section and this is a welcome addition.
I'm not sure if this has been confirmed already or not but I was told the new dashboard would arrive in November.