Xbox 360 and Kinect owners will soon be able to enjoy easy new ways to wave their way through movies and music.

Microsoft this evening announced a spring software upgrade that will let Kinect owners use hand gestures and spoken commands to watch videos streamed through Netflix and the Hulu Plus monthly subscription service, effectively upping the stakes in the rivalry with Sony's Blu-ray-equipped PlayStation 3.

You'll be able to watch these "controller-free in the living room, the biggest screen in your home," Ron Forbes of Microsoft's interactive entertainment division told the audience at the Consumer Electronics Show.

Microsoft CEO Steve Ballmer says over 8 million Kinect units have been sold.

The Zune Marketplace--similar to music offerings from Apple and Amazon.com--will also be navigable through Kinect gestures, he said.

Forbes indicated the new features, including an avatar-based chat called Avatar Kinect that can mimic facial expressions, would only be available to Xbox Live gold members who pay about $10 a month. That excludes standard Xbox Live users.

There was precious little in the way of product announcements in tonight's widely anticipated event, which was billed as a keynote for CEO Steve Ballmer but also featured a handful of other employees. (See CNET's archived live blog.)

Ballmer said that Kinect has created a kind of halo effect for the Xbox. There are more than 50 million units worldwide, 30 million Xbox Live members, and 8 million Kinect units sold, Ballmer said.

Ballmer spent a good portion of the time revisiting announcements from earlier in the day relating to a new version of Microsoft's multi-touch, table-size computer called Surface and forthcoming Windows support for system-on-a-chip processors from Nvidia, Qualcomm, and Texas Instruments. (See CNET's Surface report and coverage of the new architecture from today.)

Microsoft also highlighted Windows Phone 7, with Ballmer saying the reaction has been positive among people who have used it. There are more than 5,500 apps available today, he says, with 100 new apps appearing every 24 hours.

Forthcoming updates include: the addition of copy and paste, significant performance improvements when launching and switching between apps, and a Sprint and Verizon update in the first half of 2011.