Well, the mystery has been solved. The strange looking power button and the even stranger, track-ball like button on the wireless controller is nothing else but the Xbox Guide button.

From Microsoft’s Xbox 360 Fact sheet:

Divided into four quadrants, the glowing Ring of Light and Xbox Guide Button visually connect you to your games, digital media and the world of Xbox Live, the first global, unified online console games service.

Featured on both the wireless and wired controllers, the Xbox Guide Button puts you in control of your experience.

In addition to bringing up the Xbox Gamer Guide and the Xbox System Guide, the Xbox Guide Button lets you turn the system on and off without ever leaving the couch.

Although we haven’t seen or felt the button in real life, we assume it is a multi-function button that when depressed long enough, will power down the system.

The first press brings up the menu, and because of the four quadrants, you can use the button like a mini-digital joystick or touchpad and navigate the on-screen menu. A simple tap in the center is probably “enter” while holding it down will shut down the system, in a similar fashion as the reset button on Apple Macintosh computers.