Microsoft Xbox 360 HD-DVD drive

Upside: At a combined cost of $500 to $600, the Xbox 360 and HD-DVD represent a terrific bundled value. For the price of an entry-level HD-DVD player--the Toshiba HD-A1-- you can get a next-gen gaming console and an HD-DVD disc player. Making the HD-DVD drive external just makes good business sense for Microsoft. Unlike the upcoming PlayStation 3, the addition of the next-gen movie player is completely optional, meaning that gamers can play high-def games for a few hundred dollars less, or watch high-def movies for the same price. The Xbox 360 will also be the first player to output HD-DVDs in 1080p, though only via VGA; the highest component resolution is 1080i.

Downside: The Xbox 360's HD-DVD drive does not feature an HDMI output, which leads to a few potential problems. Your only hope of using the HD-DVD drive to watch 1080p is if your HDTV has a VGA input and the ability to display the resolution therefrom. Additionally, movie studios can program discs to display at lower resolution when displayed via component-video outputs, which could render the Xbox 360 HD-DVD drive almost useless for many consumers. On top of the anxiety of picking a player, there's still the looming uncertainty of the format war. While the HD-DVD library grows every week, the amount of top-tier titles in high-def is still pretty paltry, and studios remain split between supporting it and Blu-ray, with few of them providing films in both formats.

Outlook: As long as the Xbox 360 is without an HDMI output, we can't wholeheartedly recommend its HD-DVD attachment, although we expect it to be mildly popular among Xbox 360 owners who have the cash and the display to take advantage. If you're just looking for an entry point to HD-DVD, the upcoming Toshiba HD-A2 with its HDMI output, an $500 price, and "just a player" simplicity, is probably a better solution. And if you're looking for a gaming system this holiday season that can play movies in high-def too, the PlayStation 3 should be able to handle both nicely--if you're able to find it.