I'm using a HDMI cable, but why would that affect my Internet connection?
e: Alf left a comment on the Oddworld.com site:
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It is working in the UK right now.
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No word on other countries.
For folks in the UK not getting the update, I reckon it could be that the update is still being distributed across Microsoft's servers - it's a problem that's cropped up with Steam before, there's no reason that the same couldn't happen with Xbox Live.