"Unlike the PC version, each world in the Xbox 360 Edition is currently limited to 1024 by 1024 blocks. This is approximately the size of an in-game map. It is expected, but unknown if the world size will be increased along with the updates that will bring the Xbox 360 version of Minecraft up to date with the PC version."
http://www.minecraftw..._360_Edition#Gameplay
It'll improve. As far as I'm aware the PC version is endless, I doubt they'll manage that on the xbox, but you never know!
You can see everyone playing with the newest snapshots here:
http://www.reddit.com/r/Minecraft/ (they're not even in the PC version yet!)