I have some friends that have the hd-dvd addon for the 360. Haven't seen it in action but they seem to like it.

If you have a non-hdmi version of the xbox like most then you might want to check if that will allow you to take advantage of the new surround sound formats.

I am not sure how component cables with optical audio works with these new formats.

besides that, one disadvantage to the hd-dvd addon for xbox is i think your 360 will be running during movies, and the fan in that bad boy can get loud at times. of course that shouldn't be a problem except MAYBE during really quite dialog scenes.

I have always been under the idea that gaming systems are for games and movie palyers are for movies... but eitherway you decide I'm sure you will be pleased.

-David