No, that's not a modern art masterpiece, it's a dashboard bug you can replicate by doing the following:
- make sure the screensaver on the X360 is activated
- start any download from live marketplace that takes longer than 10 mins. to download (to let the screensaver kick in)
- leave the download going and don't touch the controller. the screensaver will dim the screen after 10 mins.
- unplug the ethernet cable or end your internet connection from your router/modem
- you'll see the screen graphics scramble on the screen when it tries to tell you that the connection has ended.
- However, when you hit the controller the dashboard screen goes back to normal (at least that is what happens to mine)