Minecraft XBLA has finally been updated to beta version 1.7.3. Unlike the patch a few weeks ago that just fixed some bugs - clay generation, infinite item glitches (we're still sad about that), etc. - this new update is a much bigger deal. It adds pistons that will let you start creating simple machines (seriously, go read up on pistons at the Minecraft Wiki, and you'll be amazed what pistons will allow you to build), and the update also adds shears which let you shear sheep or cut leaf blocks from trees (which you can then freely place in your world to add bushes or hedges to your projects). The update also adds some other fixes like stackable fences, new textures for some blocks, lighting and weather improvements, and the ability to choose new skins for your character.
The best part is that you don't have to start a new world for these changes to take effect, so you'll be able to add piston machines to the worlds you've been building in since launch. It still isn't quite the big daddy update everyone is waiting for (the next update should include Adventure Mode as well as the one we've been waiting for, a proper Creation Mode), but it is better than nothing and certainly adds enough new building potential to keep everyone plenty busy until update 1.8 arrives.