And even then, they are only supporting a subset of the incomplete HTML 5 specifications.  I would hardly call that being out.  And until IE supports it, it might as well not be out.

For what reason? IE doesn't control the market anymore and by the time IE9 is out it HTML6 will be out. Between FireFox, Chrome, Safari, and various other browsers they control between 33% - 59% of the market mattering what statistics you look at. Since older versions of IE (6 and older) are irralevent now a days for a good chunk of the web needs at least HTML4 as the base standard I'd believe the number is closer to 59% then 33%.

Plus FF3.5 might miss some HTML5 subsets but it has enough to make use of Video Bay, and soon YouTube followed by many other websites, which uses HTML5 for all videos.

No matter what HTML5 > SilverLight (plus from what I have seen it kicks the hell out of good old Java).

Does this mean the 360 will be getting a internet browser?

doubt it, just means they might cut the cost of Live Gold but instead have annoying as hell ads in the dashboard.

I can;t wait for someone to open the dashboard and hear "You just one an Apple iPod Touch"

If they were to make the Gold membership free with consent to show you ads, I would be all for it, otherwise...fuck you live!!!!

HTML 5 specs are not complete.  And will not be for quite some time.  If you think HTML 6 is coming out anytime soon, you are sorely mistaken.  IE matters because it still controls 60% of the browser market.  No one is going to design their site with video tags that IE doesn't recognize.  They will just use Flash, and to a lesser extent Silverlight.  If you think Flash and Silverlight are going anywhere, you are mistaken.  Flex and Silverlight are programmer oriented tools that enable the creation of rich applications that are guaranteed to look the same in each browser.

And if you think HTML5 has anything at all to do with Java, you have absolutely no clue what you are talking about.  You probably should have just left out that last sentence.

EDIT: Unless you are talking about applets, which were dead on arrival many years ago.

I’ve seen quite a bit of discussion today about how we’re bringing Silverlight ads to LIVE in the future.
I need to let you know that you don’t need to worry about a huge influx of ads across the dashboard. One of our core principles is to enhance, not interfere with the gaming experience, and we work directly with our partners to only deliver experiences that are relevant to the LIVE community. Silverlight will help make those ads a more organic part of the dashboard, like we’ve done with some of the NXE slots in the past. No one on the team wants to turn the dashboard into something that looks like like Shibuya Crossing. That’s just not good for anyone.

http://majornelson.com/archive/2009/07/01/advertising-on-xbox-live.aspx

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A response from Major Nelson

They already have video and audio in the ads, The Day The Earth Stood Still had a clip of the truck being 'eaten' when you browsed across it.

Yes, but now they will use the Smooth Streaming technology where the quality of video dynamically changes to your internet connection.  This way, ads can have 1080p content start immediately when you click on them.  This is great for movie trailers such as the one you mentioned.  This smooth streaming stuff is going to become prevalent in everything now.

EDIT:  Here is a Tweet from Major Nelseon:

"Blog post: What Silverlight on Xbox means. (short answer: We are not adding more ads) Long Answer: http://tr.im/qyuS"

I bet some people said the same thing about Microsoft's ChromeFX which seems to have been obliterated from history.