seems there is new protection on kinect dashboard update that stops you from playing backups full stop online or offline.guess we ll be needing a new lt firmware. see article for details
That article is inaccurate, although there is definitely something weird going on. As of now, the only game affected is Fable 3. This wouldn't boot for me on dashboard 2.0.12581.0, so if there is new protection in the dashboard, it was added before 2.0.12606.0. 2.0.12606.0 does not block you from playing all backups, just Fable 3, and it does not prevent you from connecting to Xbox Live either (EDIT - As long as you are in the official beta program. If you're not, you can't connect to Live with any of the beta dashboards.)
I am going to try some backups on my banned 360 as I updated it with the new dashboard but never tested any games.
guys this is all specualtion for now. some people can load it just fine. infact a user on another forum has the offical update from MS since he is in the beta program. he has a retail copy of fable 3 and he has used this to make a rip using a benq drive with 0800 and he says that both retail and ripped copies load no problem. either the beta update is missing something or some people have bad rips. or both
stealthdf is right. The beta update is missing the avatar pack. Xbox Scene Community has more details about it. Here is the link: