RustyGonad: http://www.engadgethd.com/2008/07/08/are-there-two-vista-media-center-updates-due-this-year/
Another rumor for the pot - looks like its been split into two releases, one this month (multi tuner etc), one later in the year (h.264)...
Looking at the state of the first beta this would make perfect sense, as the majority of the unstability is around h.264...
But then again - just like the next guy I'm only guessing...
Based on the information in that posting I'd be happy right now. It would bring proper DVB-S support and make me feel more comfortable in abandoning my ultra stable MCE2005 and heading over into Vista MCE world where i'm really looking forward to browsing photos by tags

(While i did have DVB-S hacked and working in vista mce I never felt comfortable enough to abandon mce2005)
EngadgetHD: So while it doesn't appear that the update will have any ground breaking new features, we have to say that all-in-all we're pretty excited to get our hands on the new features.
I would have considered DVB-S, hetereogenous tuners, EIT Guide, MHEG and Teletext "groundbreaking" in the MCE world..... at least for those of outside the USA