UPDATE: Microsoft's Major Nelson has posted a clarification on his website regarding the cause of the disc read errors that having been popping up, which should ease the minds of anxious gamers.

On his blog, Nelson fingers an old update as the cause of the errors, not the new update which will increase disc size:

"Clarification time! The console replacement plan that is the subject of some of today’s headlines is related to a previous update, NOT the system update that has been in public beta and will be deployed shortly.

"The new disc format that is part of the beta has been rigorously tested across all Xbox 360 models and there are no known compatibility issues.

"Hope that clears a few things up.

So when the new update rolls out tomorrow, don't worry about hitting that "Accept" button.

ORIGINAL STORY: Microsoft is prepping a Xbox 360 firmware update that starts going out tomorrow which updates the system's disc format, but the company is warning gamers that there may be a few bumps in the road.

"Following a recent update to our system software," says Microsoft, "we have become aware of an issue that is preventing a very small number of Xbox 360 owners from playing retail game discs. This issue manifests itself as a unique 'disc unreadable' or 'disc unsupported' error on the screen. We are also able to detect this issue over Xbox Live and are proactively reaching out to customers that may be impacted to replace their console."

Microsoft is reportedly offering to give afflicted gamers a 250GB slim 360 along with a year's membership to Live.

The disc format update plans to increase the storage space on DVDs used by the system by 1GB.