Xbox 360 to get built-in HD DVD drive in late 2008?

This certainly isn't the first time we've heard this rumor, but SmartHouse is reporting that Microsoft and Toshiba are working on an updated Xbox 360 with a built-in HD DVD drive. If that were all, we wouldn't bat an eye -- it's gotta happen sometime -- but there are some other, crazier aspects to this version of the rumor that set off some red flags: SmartHouse also claims that the new box will be Toshiba-branded and have dual HDTV tuners, electronic program guide capabilities, built-in wireless networking, and sport an "MP3 player" dock, which we'd imagine would be for a Zune. That's a hell of a box, right there, and while we've seen similar devices like Sony's PSX, they didn't exactly take the world by storm. Our money is still on a simple bump of the existing 360 to HD DVD, but get ready to hear a lot of about this rumor in the weeks to come.

[Via Joystiq]