At yesterday's North America DVD Forum Conference, Microsoft showed off video playback from their upcoming Xbox 360 HD DVD player
add-on. The short clip from Phantom of the Opera
was reported by Video Business to be similar in video and sound quality to standalone players shown earlier during the meeting. While they found time to mention that there is a "high interest level about HD DVD" among 360 owners and that 64% of them own HDTVs already, the only pricing information given was that it "will be the cheapest HD DVD player on the market for consumers who already own an Xbox 360 console". A quick bit of work with the calculator reveals that to mean the incredibly specific range of anywhere from $0 - $499. While there weren't any pictures available from the conference itself, Microsoft did find time to release these diagrams of the menu will allow users to select content from either the DVD or HD DVD drive when attached.
Despite their claims of "high demand" -- if it's so high, why didn't the 360 ship with an HD DVD drive in the first place -- the total pricetag for 360 HD DVD vs. PS3 w/ Blu-ray will likely be a key battle this holiday season and next, even if PQ isn't.
Update: John at the Gamerscore blog posted this animated .gif to show the dashboard in action. After selecting the disc as usual, the user selects up or down to go to the DVD or HD DVD drive.
Read - More on the HD-DVD player from Major Nelson - Microsoft Gamerscore Blog
Read - Xbox 360 HD DVD add-on unveiled - Video Business