Clear HDD Cache – XBOX 360 HUB

How Do I Clear the Cache To Resolve an Error?

Problems with your Xbox 360 console can often be resolved by removing temporary files and data from the system cache. The cache stores such items as game updates, system update installation packages, and gamer pictures of your friends.

Clearing the Xbox 360 cache does not remove your gamertag, content that you have downloaded, game files or console software updates.

Clearing the cache does however temporarily removes previously downloaded game updates. You will be prompted to download these updates again the next time you try to play the games.

To clear the system cache

Press the Guide button on your controller, go to Settings, and select System Settings.
Select Storage or Memory.
Highlight any storage device, and then press Y on your controller. (It doesn’t matter which storage device you select; the cache will be cleared for all storage devices.)
Select Clear System Cache.
When prompted to confirm storage device maintenance, select Yes.

Source = IGN Wiki