In Oblivion, we had 8 hotkeys accessed by the D-pad directions. In Skyrim, we only have two hotkeys accessed by left and right on the D-Pad, with the list of favorites accessed by up and down.

I propose something similar to the system in Oblivion. You can press directions on the D-pad, but you can also press A, B, X or Y while holding a D-pad direction. This adds 32 simple two-button combinations to use for hotkeys.