Bandit5317 from Xbox Scene may have created the greatest DIY on the geek market to date. Over the course of six months he took an original Xbox and trimmed it down to a svelte 1″ thick package.

How did he manage such a feat? Well he removed the optical drive, for starters, and added a 320GB hard drive to turn the little console into the XBMC you’ve been praying for. He also removed the controller ports in favor of some USB and obviously a good portion of the cooling internals. In fact, that may be the one drawback. The smaller frame means the box runs a good bit hotter than you might want.

But she works, and she looks damn good in that tiny black…case. Check his forum post for a gallery of pics.

For those of you thinking you might see Facebook or Twitter with the new dashboard update, you’ll have to wait. Not for long, though. Microsoft marketing man James Halton said today that Microsoft is set to release the social networks this fall on their Xbox Live service.

Halton would only get so specific as to say “”It will be before Christmas. A lot of the background work’s been done for a lot of applications that are coming.” So maybe that’s what comes with the August 11th update – background support for more up and coming applications. If you recall, that update also includes games on demand and Netflix movie parties.

Facebook/Twitter integration brings the 360 closer to the goal Microsoft so touted at the console’s release: to be the entertainment hub of the house. Now what’s there to get you off your couch? Oh, right. That would be Project Natal.

Microsoft’s Xbox Division may have shipped more units this year than last, but they certainly didn’t make more money. Not by percentage anyway.

This is the type of story that’s a little difficult to quantify, but I’ll do my best to make the mess of it all fairly clear. Yes, Microsoft’s Xbox division is reporting profits to be down some 66% from last year. Yes, they made $161 million less than last year. It’s all sort of difficult to place, though. The company sold 2.5 million more consoles this fiscal year, and Xbox Live subscriptions were up some 73% in June. So while dollar percentages may be down, and yes that’s likely due to some price reductions, it’s tough to say that Microsoft isn’t doing well.

Of course, no one’s doing well right now. The economy has had a taxing effect on our video game industry, but if you look at the full story, Microsoft is doing what I’ll call “okay.” All in all, not a bad quarter, Microsoft.