I have both a Toshiba HD-A1 and the Xbox 360 HD DVD add-on, and without a doubt the standalone player has a lot better video and sound. I couldn't believe the difference, really. I was hoping they would improve the quality with the last update they released for the HD DVD add-on, but I haven't been able to check it out thanks to my Xbox 360 dying on me. Have you already downloaded the update which came out earlier this month? There was the dashboard update, then another update. I thought it was primarily an update for the audio portion, but maybe part of it was for the video, too. I can't remember.
Anyway, size of screen would make a difference, too. I see a major difference between DVD and HD on the 60", but I was hard-pressed to see a difference on the 32" I had. The difference was there when sitting up-close, but it wasn't mind-blowing in the least.
If nothing else, though, that update for the 360 was supposed to improve the audio a lot, so I'd give it a shot, if you haven't already.
