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http://voices.yahoo.com/how-clear-failed-system-updates-xbox-360-3604959.html
The Xbox 360 has a whole host of technical issues, and while they're not all user serviceable, some can be treated right from the console with the help of a secret Microsoft code or two. For instance, if a system update has messed up your console, you can easily delete the old update in order to try again. Here's a guide to deleting failed system updates from your Xbox 360 that might prevent the console from starting up properly.
Why You Might Need To Clear System Updates. First of all, understand that clearing system updates on an Xbox 360 isn't going to fix every problem that the console has. Mainly, this fix is for when your Xbox 360 won't boot up or gives an error message when it tries to boot, AND you've recently updated the system software for the console. Don't confuse system software updates with individual game updates; we're not talking about the message that pops up saying you'll be signed out of Xbox Live if you don't update a certain game. This is the entire console's system software, and when it gets screwed up, it causes problems that need to be fixed.
The Method. It's pretty easy to clear failed system updates; hold the sync button down on your Xbox 360 console. It's the little white button that you typically press to link the system to wireless controllers. Keep holding it down, and press the power button to boot the console. Do not let go of the sync button at any time. The console should completely boot up, and in the process, it will delete the new, failed system update, allowing you to boot your console and try to re-download the system update that you need.
Problems. If your console still doesn't work after you've cleared the system updates, you likely have an overheating problem, a hard drive problem, or some other issue unrelated to the system software itself, and it's time to contact Microsoft to open up a warranty repair ticket (assuming that your warranty is still intact--do NOT try to open the console to fix it yourself if the warranty is intact). If you have problems re-downloading the system update after clearing the failed updates, be sure to double check your Internet connection, especially the ethernet or wireless adapter going directly into the Xbox 360.