Well if you read the full article, it's not as bad is MikeB makes it out to be:
Here's what I think is going on: The Xbox 360 is paying attention only to how content is "flagged" on a disc. If the disc flags a content as 24p film mode stuff, the 360 does a pretty good job deinterlacing. PC Magazine's HDTV analyst Robert Heron has a torture test of tough DVD movie scenes that the 360 actually performs pretty well on, contrary to the HQV benchmark score. The HQV disc is meant to test the ability of a player or TV to detect various interlacing cadence patterns, so this un-flagged content is just untouched by the Xbox 360.
So if you're playing a store-bought DVD movie, which often contain proper flags about the format, the 360 does a decent job. Not great, but decent. The same goes for HD DVDs—it fails miserably at the HQV tests, but those are judging noise reduction and deinterlacing. Most HD DVD movies are going to be progressive and not very noisy at all, so they look pretty darn good on the 360. Still, I saw some of the same issues with video during menus and other mixed-mode content on DVDs, so I'm not giving Microsoft a passing grade here. In fact, I'm terribly disappointed that the lame Xbox 360 DVD playback hasn't been addressed yet. That, and the fact that I still can't turn off "presence messages" (notifications about friends coming online) without turning off all notifications.
(emphasis mine)
But seriosly. Who cares? I don't know anyone who bought a 360 to play DVDs or HD-DVDs. I do have a friend who bought a PS3 for BluRay. I also have friends who bought an actual Toshiba HD-DVD player to play HD-DVDs. This whole thread is smoke an mirrors. The add-on is nothing more than a cheap alternative to a standalone player.
