One particularly troubling decision not mentioned in this post: a new version of the XNA development tools (4.0) was recently released that introduces many breaking changes from the previous supported version, 3.1. Some of these changes actually reduce the number of windows machines an XNA game can run on, and other changes remove features entirely (even though they worked before).
As a result, many games cannot realistically be ported to 4.0 unless the developer only cares about shipping on XBox 360 at any cost. Under most circumstances, this would be fine, but Microsoft has decided that any games developed using the previous version of the framework (3.1) cannot be released if they wait more than 90 days after the official launch of the new version. Oddly enough, games previously submitted using version 3.1 will continue to function, so they're not dropping support for the framework - they just want everyone to move to 4.0. Essentially, Microsoft is forcing a release date on the set of developers who actually tried to develop games simultaneously for PC and XBox, even though this kind of simultaneous development was originally one of the things that made XNA interesting.
Microsoft has also dropped support an entire platform: Version 3.1 of the framework allowed you to target games at Windows (DirectX 9), XBox 360, and the Zune. Version 4.0 allows you to target games at a smaller subset of Windows, XBox 360, and Windows Phone. Anyone developing a Zune game is entirely left out in the cold (that's what you get for being an early adopter) as well.
The switch from the previous device caps model to HiDef/Reach means that games cannot opt to run on any windows machine that supports the GPU features they require, or choose to scale their experience down based on available features. If you select the HiDef profile, your game will fail to start if any of the features in the profile are missing. Likewise, the Reach profile prevents you from using HiDef features, so you can't target any of the millions of PCs that occupy that space in-between (for example, anyone with an Intel GPU). While it is theoretically possible to ship a PC game using the Reach profile, the profile is so absurdly limited that you'd be insane to use it for anything larger in scope than a 2-week project.
I don't think they dropped XP support, they just made it harder to use on XP. It does require .NET framework 4, though.
As a result, many games cannot realistically be ported to 4.0 unless the developer only cares about shipping on XBox 360 at any cost. Under most circumstances, this would be fine, but Microsoft has decided that any games developed using the previous version of the framework (3.1) cannot be released if they wait more than 90 days after the official launch of the new version. Oddly enough, games previously submitted using version 3.1 will continue to function, so they're not dropping support for the framework - they just want everyone to move to 4.0. Essentially, Microsoft is forcing a release date on the set of developers who actually tried to develop games simultaneously for PC and XBox, even though this kind of simultaneous development was originally one of the things that made XNA interesting.
http://blogs.msdn.com/b/shawnhar/archive/2010/10/12/xna-game...
Microsoft has also dropped support an entire platform: Version 3.1 of the framework allowed you to target games at Windows (DirectX 9), XBox 360, and the Zune. Version 4.0 allows you to target games at a smaller subset of Windows, XBox 360, and Windows Phone. Anyone developing a Zune game is entirely left out in the cold (that's what you get for being an early adopter) as well.