So the in-game XMB, custom soundtracks, and trophy's are now officially released with today's release of firmware 2.40... or is it?

I think this update is too little almost too late. You can access the XMB in-game but to execute most of those options you have to leave the game anyway. There is no XMB to in-game voice chat you can only read and send text messages while in game.

The biggest disappointment is the fact that custom soundtracks must be supported by each game on an individual basis so almost no games already out for the PS3 will support custom soundtracks. Also the music cannot be streamed it must reside on the PS3 hard drive. So this 2.40 update at this point doesn't help much right now on the custom soundtrack front. This morning I popped in Ridge Racer 7 and was not able to play my own music or playlists stored on my console. When I tried via Ridge Racer 7 I got a "this game does not support custom soundtracks" message. Thanks.