I'm pretty sure most HD download services are 720p and legacy sound. You are lucky to get 5.1 Dolby. I think my philosophy is if you are going to do HD, go all the way. I want 1080p and I want HD Audio codecs and I want the highest bitrate possible. Sorry, but only Blu-ray can do that guaranteed, at present. And the fact is it will be probably 5 years (2 years if we are really really optimistic) before streaming/download "might" do that. And then on top of that it is inherently a more complex system because people basically want to just put in a disc and press "play". Unlike us, the average person is not a geek :). They don't want to network (which in most cases is what you will end up doing with a 360 unless the HD space is increased dramatically), and the market has shown a slow uptake with PVR's. People want as simple an appliance as possible to watch a movie. I don't think that has change. It will, but it will take more time.
In other words, I think Blu-ray came out early enough, before streaming/downloading was mature enough to be a real threat. I might be wrong.
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