With Xbox Companion, users can easily search for content: movies, music and TV shows using the app on their phones, and launch it on their Xbox consoles. If users want to find out more about what they are watching/listening to, they can easily find out more about it through the app. Think of it as IMDB for music as well as video on the Xbox. Lastly, the app will allow users to turn their phones into remote controls to control the playback of content.
No word on whether it'll be available for non-Windows Phone users, or when it'll be released, but if it turns out to be on Windows Phone-only, I guess it gives Xbox 360 owners another reason to buy a WP 7 device.
