Microsoft has started rolling out an Xbox 360 system update today to address the color space on video playback. Xbox owners complained of problems after the big Xbox 360 Dashboard update in December, and the software giant promised a fix which it is delivering today. The issue was related to black levels and washed out colors in videos and Microsoft's Major Nelson says the fix is "immediately notable in the dashboard."

The fix is rolling out to third-party applications over the coming months, so you may still experience color issues in apps until those are addressed. Microsoft has also increased the performance of the Dashboard with the latest update, addressing some concerns over the new interface. There is no word on the 1080p playback restriction, but we'll let you know if that is fixed in the future.