anybody else think that adding built in HD-DVD will be a bad idea?

A lot of scared Sony fan boys yelling, now that makes me think the "ultimate" sku is a great idea :)

At best this rumour is part of a psychological war MS is running against Sony, perhaps to panic them into making a pre-emptive strike of some sort. I don't think it'll happen, well the inclusion of the HD-DVD unit that is. Everything else - the cooler chipset, near silent fan, Wi-fi built in, bigger HD - is definatly needed however and would only help MS.

Why would someone buy this over a PS3?

 Better games I believe.

None of these new features mean much to me. I just wish the original 360 would've had a bigger hard drive. I only have 1.5 of my original 20 gigs left. $200 is a tough pill to swallow.

@picko

I think by autumn 2008 PS3 will have a much improved library to rival the 360.

The PS3 killer is not the Xbox 360, its the blue ray player. Had it never existed, the PS3 would be supreme today

Bad idea, most people buy systems after a price cut, not many after a price raise.

Given that the external HD-DVD drive cost £100, the cost of it would be at around £400 (Elite at £300). Of course there is also wi-fi and the hard drive to factor in so it would cost even more to produce, but they could not sell anything at more than £350 I believe. I don't believe this rumour at all, unless of course they sell it as a home cinema system, rather that a games console