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Yeah that's true, both Live and the PSN have movies and tv shows for download. I guess that will be a major use in the future.

@the DS/Gameboy comment, its just a handheld, its not a big multimedia device.
Isn't it correct Microsoft wants the Xbox to be the center of the Entertainment center, they want to be in the living room as a good multimedia device, adding bluray support would only add to that motive.

But DD seems very promising, do you know if the videos have protection on them? Is it possible to move them to a flash drive and watch them on a PC?