Minecraft – Does Xbox Live save Minecraft worlds

Everything relating to your online gamer profile, such as gamer score, achievements, and progress in Xbox-live multiplayer modes, will carry over. You will have to migrate your Xbox live account, which can be done simply by logging in with your current credentials on the new Xbox.

Single player progress and saved games, however, are another story.

No, if you purchase a game via the Xbox Live Marketplace, there is no option to get that game on DVD. It's a digital download only. The prices also frequently don't align - especially if you're used to buying used, the game prices are typically marked up significantly to make up for the "convenience factor" of the digital download.

Microsoft controls what content plays on the console, whether it is on optical storage or digital download. If you use/connect to Xbox Live while playing, Microsoft can force you to sign out if you refuse a console or title update. This may lock you out of certain features (especially online/internet enabled features) of the game. The licenses are certainly harder to revoke when you own the physical media, but more and more the direction is towards licensed content, and not ownership in the traditional sense.

Recently Microsoft added support for connecting external storage devices, and it is possible to copy your content to these external devices. However, I don't believe the intent is for backup. The Xbox 360 will use a max of 16 GB of storage space on an external device.