Microsoft appoints SVP Bach to tackle Microsoft's music business. Mr. Bach is the top Xbox executive. So it comes naturally that the Xbox 360 will be play a center role for Microsoft's digital music offering.
Microsoft is very active in all areas of the digital music business, but Apple is just miles ahead. Apple's iTunes and iPod offering is very hard to beat right now. Not sure if the Xbox 360 can change that.
More details on CNET (Thanks Yizhi S.).
Microsoft announced also recently that they will start a subscription music service, like the one from Napster and Yahoo!.