Apparently when I was looking through the picture gallery on the dashboard with my USB stick and some photos, I noticed there was pretty much three options. One of the option was to set the image as the theme on the dashboard. Essentially the currently selected picture from your USB stick can act as a wallpaper. I never knew this and I'm not sure if this is a NXE feature but I've never heard anyone talking about it or using it. You'll need a relatively large image to work with or else the image does enlarge and look pretty bad though. It seems to read JPEG but  not GIF or PNG images. I'm sorry if this doesn't make much sense but I've only discovered it and haven't had much time to explain how it's done.

Anyone know about this or tried it before?

This feature has been on Xbox 360 since the beginning. My friend had a custom background on his Xbox 360 since 2005 when he got it but I never created my own custom background with a JPEG image from a USB drive.

This will only allow you to set a single image as the background for everything.  That's where they get you - in order to have different backgrounds for different sections of the Xbox 360 dashboard, you need to purchase a theme.

So, "theme" is really a misnomer in this case.  It's a background.

"This feature has been on Xbox 360 since the beginning. My friend had a custom background on his Xbox 360 since 2005 when he got it but I never created my own custom background with a JPEG image from a USB drive."

"This will only allow you to set a single image as the background for everything.  That's where they get you - in order to have different backgrounds for different sections of the Xbox 360 dashboard, you need to purchase a theme.So, "theme" is really a misnomer in this case.  It's a background."

The only thing is, with the NXE, the bottom of the image will be cut off. There's probably a resolution that works out though.

"This will only allow you to set a single image as the background for everything.  That's where they get you - in order to have different backgrounds for different sections of the Xbox 360 dashboard, you need to purchase a theme.So, "theme" is really a misnomer in this case.  It's a background."