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At about 2 a.m. this morning, Microsoft began rolling out the New Xbox Experience, its free, downloadable relaunch of the Xbox 360’s dashboard interface. The NXE’s relaunch is meant as another attempt to clean up the 360’s cluttered blade-based interface. Since the console launched three years ago, Microsoft has made numerous large and small revisions, governing everything from media sharing with your PC to a full-fledged online video store.

But the NXE is much more than a simple redesign. The service also features the launch of a Wii-like avatar system. You’ll be able to create a 3D, cartoony representation of yourself that can be used in several new and upcoming 360 titles, including this week’s Xbox Live Arcade game, “A Kingdom for Keflings.”

If you’ve got friends in far-off places, you’ll love the eight-person online chat feature, which a group of people can use to meet up online, play games, share photos and just generally socialize. I do a lot of gaming with friends on the East Coast and in the Midwest, so a seamless chat feature is a godsend. Until now, private chats have been limited to just two gamers, and too many Xbox Live-enabled games only let you chat with team members, or allow everyone in your online match to hear your entire conversation.

If you’re a Netflix subscriber and have an Xbox Live Gold membership, you’ll be able to stream some movies and TV shows to your Xbox 360 using the same Netflix Instant Queue that lets you watch movies on your PC without waiting for the pesky disc to show up in the mail. A word of warning, though: As of right now, movies and TV shows created by Sony studios may not be available to watch on your 360, though you can still see them on your PC. Sony apparently did not want its movies being shown for free on 360 when there isn’t a system in place to show them on Sony’s own PlayStation 3.

The remaining cool big feature (though there are many smaller ones) will let you install game discs to your 360’s hard drive. Now, you’ll still need to have a legit copy of your 360 games in the tray when you want to play them. But the optional installation should cut down on some wear and tear on your machine as well as quiet the 360’s notoriously loud DVD-spinning mechanism.

While these features seem destined to become favorites with gamers everywhere, a launch as big as this is bound to have some inevitable snags, so try not to let them get you down In the past couple of years, Microsoft has appeared to be caught off-guard when new products or features have proved to be wildly popular. From the botched beta test of “Halo 3” multiplayer to the infamous post-Christmas Xbox Live outage of 2007/early 2008, huge crushes of gamers accessing popular new games or Xbox Live features have brought the service to its knees, if only temporarily.

Just last weekend, some combination of events most likely related to the large NXE beta test or the millions of people playing “Gears of War II” made the service extremely balky, with gamers being booted off Live and game invites and matchmaking generally being slow.

About this time last year, Microsoft launched the Xbox Live Video Marketplace, which lets 360 owners download movies and episodes of TV shows to watch on their home TVs. The service works so seamlessly now that it’s easy to forget that its rollout was plagued by download speeds only Comcast’s Slowskys would envy. Keep this in mind if the first few days of the New Xbox Experience have you reaching for your sledgehammer.

Microsoft might have a reputation for flubbing these introductions, but give ’em a few days and they manage to make things right. After last year’s holiday outages, brought on by a crush of Christmas n00bs, everybody got Xbox Live Arcade game “Undertow” for free.

It can be irritating when a service you pay a subscription fee for hiccups and stutters, but on the other hand, the NXE update is free and has been the subject of a massive public beta test. If you hit a bump in the road, try limiting the angry e-mails or forum posts to one a day, tops, and pop in an offline, single-player game. Your mental health will be better for it.

And who knows? Maybe this transition will be a smooth one.