Major Nelson has tweeted an, albeit non-working, link to confirm that PayPal is indeed coming to the Xbox 360 as we reported in May.
The tweet states, "majornelson New Xbox 360 System update brings expanded PayPal functionality http://mjr.mn/mOCilB
This is all well and good. It also shows how close Microsoft is drawing to eBay. PayPal is owned by the auction site, as was Skype until... Microsoft bought that company