The Xbox 360 system cache stores such items as game updates, system update installation packages and gamer pictures of your friends. You can often resolve issues with your Xbox 360 by clearing the system cache.
The following are not removed when you clear the Xbox 360 cache:
Content that you have downloaded
Console software updates
Clearing the cache removes previously downloaded game updates. You must download these updates again the next time that you play the game.
To clear the system cache
Press the Guide button on your controller, go to Settings and select System Settings.
Highlight (but don’t select) a storage device, and then press Y on your controller for Device Options. Note It doesn't matter which storage device that you choose. The cache will be cleared for all storage devices.
On the Device Options screen, select Clear System Cache.
When prompted to confirm storage device maintenance, select Yes. Note When the system cache has been successfully cleared, you’re returned to the Storage Devices screen. You can then press the Guide button on the controller and return to Xbox Home.