Seems like MS has been updating their dashboard again the last few days.

New dashboard version is: 5659 rev. 17f14d00 (original LIVE2.0 (some call it LIVE1.7 now) was 5659 rev. 17e4cd00).

It's in fact a 'final' version of the LIVE2.0 with probably fixes and few other stuff.

What we know so far:
- It updates automaticly if you select the LIVE option on your dashboard or if you select the LIVE option in a game. If you have the 5659 rev. 17e4cd00 dashboard and you did not disable "Auto Sign-in" it might update as soon as you boot to your MS dashboard.

- MS also made a special page explaining the automatic updates.
If I understand them correctly it says future updates will be fully automatic even if you don't choose the LIVE menu(?). Only option left is to disconnect your xbox from the Internet:

These communications occur only if your Xbox is connected to the Internet. To prevent communication with the Xbox Live service from happening, you will need to disconnect your Xbox from the Internet.

Also note they say:
As part of the Xbox Live Dashboard update process, certain files and directories in the Dashboard system area will be deleted and new files created. This will not affect saved games, accounts, downloaded content, or soundtracks currently accessible from a game or the Xbox Dashboard.

There can be alot of interpretations for that ... so I don't make any assumption.

- The dashboard exploits will not work on this version - they were already fixed in rev.17e4cd00. GameSave exploits will ofcourse work - those are bugs in the games.

- If you don't have the LIVE2.0 (5659) dash yet, it will NOT update unless you hit the LIVE panel on your dashboard or the LIVE option in a game. So if you don't use XLIVE we suggest you just keep using the older dashes.

- Is it normal you have to try many times before the update works? Yes ... the Windows2003 server can't handle the load ;)