New game content usage rules make it legal to use gameplay footage, screen shots and other elements from MS titles in user creations.

Halo 3 screenshot

At its Gamefest 2007 events, Chris Satchell, general manager of the XNA organization at Microsoft announced that effective immediately, some content published by Microsoft Game Studios and owned by Microsoft is now available for non-commercial use by consumers.

Consumers may now use gameplay footage, screen shots and other gameplay elements from popular Microsoft Game Studios titles including the Halo franchise, Forza Motorsport, Viva Piñata and Age of Empires.

Basically this means consumers can now use Microsoft Game Studios titles to create machinima, short films and other such things. However, there are plenty of restrictions still in place including not being allowed to use the soundtracks or audio effects from the original game, add to the game universe or expand on the story told in the game.

You'll find all you need to know over on Xbox.com.