Too bad over half of Xbox users dont have a harddrive, and the other 3/8 only have 20GB.

Nothing is better than having ur movies and games on a physical format. 2 me and many others, this is actually more convenient and way better than downloading them, which should b just an option. The download service is just suitable 4 music and videogames for portable consoles, anyway.

Besides, what if ur Hard Drive crashes down or something similar, huh?..., and about them having da same picture and sound quality than a Blu-ray, let's just wait and see, shall we? Personally, I prefer paying a little more 4 a better quality PHYSICAL product, thank u.

This whole thing just sounds like another sucky 360 feature, there is nothing remarkable or exciting about it.

Source? or trolling?

Eh with Digital download you won't be able to resell that movie if things get tight at home, you won't be able to swap with friends and it would take ages for people like me to Download a HD movie on a 3mb connection. Plus think of the spaces on your hard drives that would take up. If you delete a film just to clear some space on your HDD, you'll have to redownload that film again.

Quick question. How big are HD movies in size? Are they 2-3 gigs or more

This isn't really a 360 feature.  It is a MS Zune Marketplace feature that is placed on the 360.  The movies are not directly tied to your 360 so a hard drive crash means nothing.  Just download it again, or in the case of streaming, your hard drive means nothing.  Having the movie purchases tied to your Windows Live id means that any software that allows the Silverlight Smooth Streaming and the Zune Marketplace can instantly stream your movie collection.  All without hard drive space. 

Can no one else see this?

I know what MS could do.  They could adapt blu-ray into the 360.  That well solve everything.

I do not get why people say digital distribution won't be mass market?!

1. It happened with text (MS Word, .pdf, newspapers online, eBooks etc)
2. It happened with pictures (digital cameras, USB picture frames)
3. It happened with Music / audio (iPod, .MP3, iTunes is the largest store for music worldwide, podcasts)
   Try to buy a portable CD-Player at retail
4. It is happening with games (PSN, Xbox Live Arcade, DLC, Games on Demand)
5. It is happening with movies (Zune Marketplace, Apple TV, netflix, amazon.com even offers VoD)

It would be quite ignorant to say that videos or games are immun against digital distribution.

The porn industry has already moved to digital distribution. That should be a telling sign. The porn industry has always been ahead of the adoption curve for video formats.

The porn industry probably moved to digital distribution because of the anonymity of the internet, most people are embarrased to go into a store and buy porn, let alone the whole effort of going to get one is hard to justify for what you get in return.

Yup, and the same thing happened in the early 1980's. People were too embarrassed to go to porn theaters. Instead they bought VCRs and watched them at home. That accelerated the growth of the video industry. 

Same thing is happening today except with digital distribution.