...but I'm having a hard time understanding why I can't download movies and, at the same time, play a game without signing off from Xbox Live. It's not the biggest deal in the world by any means. That said, when I'm downloading The Dark Knight, I'd  much rather be playing Grand Theft Auto IV than sit there and stare at 0% for 20 minutes.

Does anyone know anything more about this? Is it Microsoft being lazy, frugal, or is it a technical nightmare?

Like I said, I'm no programmer! =P

The reason is that if you are playing a game that needs to connect to Xbox Live for certain things while you are downloading something the two things running at the same time would take up so much bandwidth that your game would respond slowly and, if there are enough people doing the same thing, crash the servers.

Yeah it's either that most people's internet can't handle it, or the 360 doesn't have enough RAM to multitask.

Depends on the game, I thought.  If the download doesn't interfere with what your game is doing, then it will continue.

"The reason is that if you are playing a game that needs to connect to Xbox Live for certain things while you are downloading something the two things running at the same time would take up so much bandwidth that your game would respond slowly and, if there are enough people doing the same thing, crash the servers."