With the release of the Spring Update we did provide a way for our product support engineers to help users diagnose and clear content from their system cache. This is most useful for the engineers to help those who are unable to download a game update, a system update, or who are having problems with their achievements.
The instructions for performing these steps were posted on Xbox.com in the forums by one of our support folks and wow....in a flash it seems like every website and forum site picked up on it and started to spread the word.
Below is the official word on this feature which the PR team is sending out to gamesites and news organizations who've asked about it.
The HDD cache clearing feature is a part of the Xbox 360 technical support process and is only supported in those instances. While the cache clearing operation will not harm or render your console inoperable, it should only be used when instructed by the Microsoft customer support staff. As always, any gamers experiencing any issues with their console should contact 800-4-MYXBOX instead of attempting to troubleshoot on their own via this feature.
I can provide a little more context on this. Clearing out your system cache:
-IndieGames (Daryl Welsh)