Windows Phone 7 Mango will bring the old Xbox Live Extras right into the Xbox Hub, and this includes interacting with your Xbox Live avatar, which seems mainly in the form of taunting and irritating the poor fellow.
In the video above, from the 3 minute mark, we can see the avatar respond to touch, orientation and music, and we can also see the increasingly irritated avatar respond by breaking the screen, swiping the panorama to one side and eventually just walking off into the distance.
The Xbox Live avatar integration is likely one of the many Delighters the Windows phone 7 development team has scattered throughout the OS to invoke â€œpleasure, enjoyment and loveâ€. I think in this case Microsoft has succeeded pretty well.
Thanks Morten for the tip.