XBLA games are downloaded from MS web servers IIRC (correct me if I am wrong) and with the micro-transactions idea (which can expand to buy a group of XBLA games for a "bundle" price) should encourage more and more publishers (big and small ones) to push XBLA a lot (especially those who already have Xbox 360 SDK's already and have some experience using the development tools for the console, even some basic experience... not all titles need to use all three cores and long shader programs

).
No risks over-producing or under-producing game discs, not to worry about retailers' cut on your games and managing shipment quotas to retailers, being able to target customers accustomed to Yahoo/MSN Messenger style downloadable/online playable games and not just hard-core gamers that worry about anisotropic filtering or correct dynamic shadow casting by objects illuminated by lights in the level, etc...
Games like Geometry Wars, Joust, Robotron, but even newer games like Gauntlet: Dark Legacy could work (you could compress or eliminate all videos with MPEG4 and leave them in 480p and compress well the audio and compress heavily all other art assets to make the game fit the < 64 MB current constraint) online... there is tons of space and with the online distribution model and the openness of the platform (well, if you are a licensed Xbox 360 developer, XBLA is almost a free aside opportunity given to you to create yourself a new cash stream).
People want content, people like low cost games, people like not moving outside their house to get new games, people like to be able to try demo's before they buy a game, people like quick downloads... XBLA provides them all this.
With good compression of video and audio data even many games from the PSOne era could efficiently come to XBLA (hopefully they allow 480p video for FMV for XBLA games): think about it many PSOne games used M-JPEG for videos not MPEG4 AVC (you could decode via software on the XeCPU) and Redbook Audio or compressed audio with probably much less efficiency in terms of quality:file size ratio compared to WMA.
N64, SNES, NES, MD/Genesis/Sega-CD/32X, Master System, a large percentage of various arcade platforms, etc... games should have NO problem being prepared for and sold on XBLA and people would buy them... and if the Virtual Console idea pulls more and more people in the "retro" mood the more this will benefit XBLA (unless Nintendo binds developers that release games on the Virtual Console service to exclusivity which would SUCK!!!!).
XBOX 360 has more than enough raw processing power to very easily allow the use of multi-platform oriented engines dedicated to provide resources as IF you were developing with 2D focused platforms avoiding a lot of work (I think there is a market for light weight multi-purpose 2D and 3D engines specifically for the requirements of the XBLA delivery method... hey, we will see XBLA titles based on UE 3, so I do not think I should say more about it

).
If developers are smart they will find a way to enable user-created content, for a price... think about an XBLA specific version of the AGS
http://www.adventuregamestudio.co.uk/ engine: like what they are trying to do with that PSP game and associated game creation tool, but with much added power(which can be used to abstract in inefficient, you are not programming DOOM IV

, yet easy to use wrapper functions doing lots of work for you) and most of all backed by the XBOX LIVE platform.
I hope for gamers' sake that most of all Xbox 360 licensed developers and MS itself realize the potential gold-mine they are sitting on and that Sony and Nintendo understand and implement an online system that is at worst equally robust and well featured, but aims at beating it (this way LIVE too would try to evolve and beat their competitors, etc... and we gamers would benefit too

).