I found this while Digging; a quick rundown of what's going on in the various homebrew scenes. I am actually quite surprised that XNA for the 360 doesn't have a bigger interest. In his article, he points out 'Microsofts XNA platform is at the moment the only "Homebrew" but paying to use XNA doesnt appeal to me.' Funny, because a few paragraphs later when talking about the DS he says "all you need to run homebrew on the Nintendo DS is the Console (obviously), and a Flash Cart Combo." The Flash Cart Combo costs more than XNA does! Well, at least for the first year. XNA is a subscription based service, but for the first year it clocks in at just under $100.
In fact, speaking from experience, the XNA development process is much cleaner than DS homebrew. With DS homebrew I've been using a combination of C libraries (libnds and palib) along with the modified version of the gcc arm7/arm9 cross compiler offered with devkitPro. This makes it possible to build C and C++ applications for the DS, but it certainly doesn't make it easy by any stretch of the imagination. You have to be an experienced C or C++ coder to really do anything with the system, and while it certainly has some documentation for the systems, you have to learn a vast library of esoteric function calls to do some basic things, and many of these functions are under documented. I've even had to resort to ARM assembly in order to implement a mutex for processor synchronization, which was completely lacking from either api.
XNA on the other hand, is very well documented, and offers a better development environment. Simply install Visual C# Express (which is free), download XNA (which is also free for the PC version), and start working. You don't have to pay the XNA subscription until you want to run the game on your 360. With some clever, platform independent programming you can write and test your homebrew on your own computer without having to run the game through an emulator. The XNA library is exceedingly well documented, and you have the entire C# library at your disposal when you go to write games. There is even an NES emulator already written for it (XNA has only been out for a few months).
There are, of course, things which are bad about XNA. Development is limited to the Windows platform, and forcing the users to use C# will drive away some of the hardcore C/C++ developers. I don't think that XNA is purposefully neutered, as Steve so eloquently puts it, but I doubt we will see a PS2 or Xbox emulator for XNA any time soon because of it. In order to prevent a lot of exploits which would lead to game piracy, you really need to limit pure C/C++ code from running on the platform...or at least turn on massive amounts of protections such as making the stack and heap non-executable.
I see XNA as a small step in the right direction, but I do wish they would further open up the 360...since I'm not sure I'm ready to risk breaking my 360 with a mod chip for C++ homebrew quite yet.