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MAFKKA said:
Im not sure i get this? What is this and why is it so WOW!?

This is a full hd stream to your Console right? Haven't you been able to do so before? Or what? I dont get it? Please explain. Because atm i run PS3 Media Server with full hd stream from my server to my PS3 on a daily basis.. and have been for the last 8 months or so, but whats the difference with this thing? Is this like NetFlix but with full HD so that you have to subscribe and/or buy your movies, and once you done so the stream starts?

This isn't for streaming from your own network, not that it could not be done over your own network, just that it would be unnecessary.  This is a general technology for streaming video over the internet.  Currently it is being used in MS's Silverlight, but it will most likely be used in everything in the near future, unless of course MS has patents around some of the innards.

It is neat in that it start instantly and will dynamically adjust to the bit rate of your connection.  As an example, Netflix Instant Streams will actually stop if your connection degrades to the point where the buffer has emptied, and then restart at a lower quality.  Using this Smooth Streaming, the stop isn't necessary because the buffer is being dynamically adjusted to the best bit rate possible.  What intrigues me is how the system is loading data into the buffer.  There is some pretty fancy stuff going on there. 

I wonder if they are now going to be going to a one charge fits all model instead of charging more for an HD video.  Who is to say someone pays for an HD video but their connection only allows for SD quality.  Probably will be up to the consumer to know to just get the SD version.