PayPal for 360 on May 19, Kinect Avatar on 27?

More rumours from Microsoft camp as Joystiq obtain details from a tech support employee about the 360’s annual spring dashboard update.

The new update is said to add support for the company’s new disc format (which you can expect games to be taking advantage of later in the year), as well as bring PayPal support to the system, allowing for easier ways of spending your hard earned cash.

It also suggest that Avatar Kinect, a feature that has nothing to do with any blue-faced James Cameron movie, will arrive on May 27. The update itself will be rolling in six separate waves from May 19 to May 30 to ensure a high quality deployment, whatever that means.

Microsoft is tight-lipped on the update itself; we guess the answer will come in around nine days though.