XCP

[edit] General Info

It's been found [1] that Xbox360 Live Arcade downloads files with the extension .xcp over unencrypted http on port 3074 for content distribution.

XCP stands for Xbox Content Package (from http://forums.xbox-scene.com/index.php?s=&showtopic=462911&view=findpost&p=3067263)
They appear to have no headers and be symmetrically encrypted. (This information from conversation in #free60)
It may be possible to use the avatar downloads to glean more info about the file format.
The communication is pure http and you can redirect traffic to a local webserver, however it does checksum the file
Content downloaded with licenses are locked to a 360 at purchase
- Box A downloads trial
- Box B can run the same downloaded trial
- Box A upgrades trial to full
- Box B can only run in trial mode (if available)
Content is downloaded and extracted into place
When upgrading to full license the 360 dials home and then some modification is made to lock content to the particular box

xcp files are not new to the Xbox 360.