I'm all for Microsoft using Blu-ray in the next xbox console, while i have been very quick to adapt to downloads,
i still think it's important for them to cater to everyone possible.
Which makes Blu-ray a sensible way to go. (Maybe if the HD-DVD player was built into the Xbox 360 originally, the story would have been different)
Royalty wise, Microsoft should be in no position to complain, they're paying royalties to the BDA, instead of just Sony, and even if that was the case, Sony sells pc's with windows OS on them, royalties for who? MS off course.
Before i get hated on, i own both PS3 and Xbox 360. (I prefer 360 actually)