Helping to kick off E3, during a live event in Los Angeles, CA, Microsoft announced new improvements to the Xbox 360, debuting Kinect, formerly known as “Project Natal,” a controller-free way to enjoy games and entertainment so everyone can have fun, along with a new Xbox 360 console, with built-in Wi-Fi N and a 250GB hard drive. The new Xbox 360 also comes with an Xbox 360 wireless controller, Xbox 360 headset, HDMI output, USB flash drive storage, and will be available starting this week for $299.99.

“At Microsoft, we believe fun is a universal magnet, uniting us and connecting us all together,” said Don Mattrick, senior vice president for the Interactive Entertainment Business at Microsoft. “We believe interactive entertainment is the greatest form of all entertainment, and it should be open and approachable to as many people as possible. It is this belief that led us to remove the last barrier between you and the entertainment you love. By making you the controller, we will transform how you and your friends experience games and entertainment.”

Kinect for Xbox 360 will be available in North America on Nov. 4th, and will roll out to the rest of the world thereafter. Kinect tracks your body movements and gestures, and even understands voice commands. Movies, for example, can be played simply by saying “Xbox, play.” Gestures help users navigate through menus and make selections, and movements such as kicking a ball translate into actions onscreen, allowing gamers to control their environments in unique new ways. No controller is required.

Also announced during the live event, Xbox LIVE Gold members will have free, instant access to more than 3,500 ESPN live global events every year on ESPN3.com, including college basketball, college football and bowl games, MLB, NBA, international soccer, tennis including all four Grand Slam tournaments, golf majors and more. With Kinect, fans will also be able to control the action from their couches with just their voices or a wave of the hand.

Video Kinect, which lets users visually commincate with family and friends around the world, also made its debut. Video Kinect features a camera that pans to follow your movements and adjusts automatically to make chat on Xbox LIVE simple to use. Beginning next year, Microsoft will also link Video Kinect with Windows Live Messenger, allowing the Xbox LIVE community to have real-time video conversations with hundreds of millions of PC users around the world. It will also integrate custom news feeds, weather, and videos from Bing.