Microsoft is supposed to reveal details about a new Xbox 360 game developing system for the masses.

That is right; Microsoft wants you to build your own Xbox 360 games. The XNA Game Studio Express is supposed to make game development a drag'n'drop experience.
Microsoft would like to see an explosion of amateur Xbox 360 game makers similar to the success of amateur video on the net.
XNA Game Studio Express is supposed to launch on August 30th as beta and will be free. If you are actually wanted to publish your homemade Xbox 360 game you have to join the 'creators club', which costs you $99 per year.
Microsoft will release more details today at the Microsoft Gamefest 2006 (site). More details also on Arstechnica and on the WSJ (subscription).