This lecture was given by pretty much the core audio team at Bungie (Marty O'Donnell, Jay Weinland, C Paul Johnson, and Mike Salvatori.
First off let me just say that in my opinion, Marty O'Donnell is one of the best composer/audio directors I have ever seen. He, and his team are very passionate about audio. It really inspires others to push as hard as they do for audio perfection.
Jay Weinland started the lecture by talking about how things changed from H2 to H3. Basically, the fundamental issue between the Xbox Gen1 and Xbox 360 was that the DSP audio chip was removed from the 360. Also, with Gen1, the HDD was guaranteed to be there, but with Xbox 360, HDD is optional. So the system has to work with both configurations. With HDD, its easier, stream everything from HDD and use a small amount of system mem (with Gen1, the audio chip was used, so literally a few MB of system mem was used). This basically meant that more programming was required to handle the audio on the 360. Matt Noguchi and help from Microsoft were employed with great success.
C Paul Johnson then spoke about LOD and how audio levels were set based on distance, which was new with the 360. Also, the algoritm developed took into account whether a HDD was attached or not, and audio is culled if its missing for a "degraded" but functional system. He also demonstrated how the looping works (to save space but randomize so it does not get boring for the user). This was talking about ambient sound primarily.
Marty then spoke about how he composes and tools used to do his magic. He demonstrated how he puts various clips together with in house created tools (Guerilla) and other tools.