I feel that with Twitter, Facebook, and Last.FM being included in the recent Xbox Live update, the new Marketplace stuff kind of got lost in the shuffle, and in my opinion, that was actually the most important part of the update.  Rewinding back about a year ago:  My wife and I had just sat down to watch some TV and not one of the gazillion channels we pay for had anything worth watching.  We went over to OnDemand to rent a movie, and it also had nothing.  We decided to check Xbox Live Video Marketplace, which in reality had FAR more content than our OnDemand service.  The very first thing I noticed was that 720p was the highest supported resolution.  No big deal--we rented Tropic Thunder and got comfy and ready to watch the movie.  The the downloading started.  Much to our dismay, we found out that you had to download at least 30% of the movie before starting to watch it AND needed enough space on your hard drive to keep a buffer.  Unfortunately, I had little space left on my 20 GB hard drive, so I had to delete a lot of stuff to get the movie to work right.  45 minutes later, we were watching our movie.  It was a very frustrating experience.

That very experience is why I couldn't wait for the Marketplace update.  Microsoft boasted that there would be "instant on" 1080p video streaming that would require no downloads, all thanks to Silverlight technology.  I was skeptical about some of their claims, but that has been cured today.  We have a house full of sick people and a snow storm on the way, so we decided to hunker down and try the new movie service. 

I rented Hoodwinked and chose the streaming option.  A quick test ran and my connection was good enough for 1080p streaming.  Instantly after that, the movie started.  We are about an hour into the movie right now.  It has not hiccuped, stuttered, or stalled one time.  I'm also noticing that even when I get up close to the screen during some of the darker scenes, I see no pixelation or any other evidence of excessive compression (which is what I usually see when we get an HD movie from Comcast).  I can also honestly say that the video quality rivals anything I have seen on BluRay.  It honestly looks like I AM watching a BluRay.  I think it's definitely safe to say that even though the 360 does not offer the option to play BluRay discs, it definitely offers an alternative that looks and sounds every bit as good. 

The drawback?  These are $6+ dollars a pop while my Netflix BluRay w/ Instant Streaming account is just a couple more dollars than that for whatever I want to watch all month.  But I look at it this way--we watched our Netflix movie this weekend and still need to get it back and get our next one, so Zune Marketplace was the next best option.  If I was still a 360 only owner, the BluRay player on the PS3 would no longer be a feature that would lure me over to the other side.  In the end, it's really only the difference in game libraries that now sets the two machines apart. 

I agree with you. The Zune Marketplace streaming videos just made Xbox 360 the definitive OnDemand entertainment offering in the world. I only have a 720p TV but I rented a movie and it was flawless and looked and sounded identical to my blu-ray movies at 720p. I should be getting a 1080p TV soon so I can give my updated opinion then. My internet did stutter at one point, but it was amazing how the video very smoothly transitioned between resolutions without stuttering or pausing. It jumped for all of 1 second to SD then back up to HD as my internet stabilized again after that momentary spike of traffic or whatever.

I agree--I don't know how it was at the very beginning, but as of about 2 years ago when I got my 360, the video marketplace content was always worlds beyond what I could get on Comcast OnDemand just from the standpoint of sheer volume.  It's almost like my cable box on demand service is like one of those Red Box kiosks and Xbox Live is liking having the entire video store.  (maybe not that drastic of a difference, but you get the picture.)  Now you have the same selection, but with the added bonus of instant streaming instead of downloading.  It's the first time I've felt like the video marketplace is a AAA service.  Having to wait for the movie to download before watching it discouraged me several times from renting movies on my 360.  That problem is now solved.

Again, the only drawback is cost.  My Netflix membership, even paying for BluRay access, is a far better deal.  But for those times when we're in between movies, Zune Marketplace will now be my go-to option rather than my cable company.  You can't beat the selection and the instant streaming 1080p.  And I will reiterate, it is definitely BluRay quality.  If you are a 360-only owner and that little green monster has been getting to you about PS3 having BluRay, that problem has now officially been solved on the 360 and has proven to me once and for all that proprietary physical media formats are simply no longer needed.  If Netflix could get its entire library to do what Zune Marketplace is doing, BluRay would simply no longer be a viable format for people who have a good internet connection and either a PS3, 360, or some other form of Netflix compatible hardware. 

Well its all relative to your syetm. If you dont have a receiver or PS3 set to decode your audio for TrueHD or DTS or PCM it will sound the same since it is the same.

Pretty much the same for video in relationship to your viewing distance. Alot of people think their BD's will sound better on their system without knowing the reason BD's sound better is when you have a receiver or player to decode the actual HD audio so there actually isnt a difference unless your system is set up properly.

I think video quality only sees a difference if you ahve a 1080p set at the right distance in relation to screen size.

http://hd.engadget.com/2006/12/09/1080p-charted-viewing-distance-to-screen-size/

This should be taken into account, if you up your resolution from 720p to 1080p it needs to be in this range to see the difference.

Very true--

I still think it's funny that so many people now have HDTVs and still don't know that they're not even watching anything in HD and are still using the TV speakers instead of their entertainment centers for sound.  My inlaws have one big HDTV in their living room and several small HDTVs in different rooms of the house.  (Yes, they are the type of people who have a TV on at all times no matter where they are.)  They also have a standard def tube TV in their basement.  Guess which TV has the HD digital cable box attached to it........you guessed it, the standard def TV!!

They do not know or care that the HDTV could give them really good quality HD programming if they would just move the digital box upstairs to the big TV.  I have even offered to do it for them and set it up to run everything through their Bose system.  Not a chance.  They want everything the way it is because they "don't have time" to worry about stuff like that.  (Yes, that really is the excuse they give.)  They came to my house the other day to watch a football game and could not believe how good the picture quality was on my TV, and I said, "You could have this at your house too!!"  And that's when they tune out and stop listening to me.  They just don't care that their gigantic HD flat panel could give them pure TV watching bliss.  I've often thought about taking my PS3 over there and showing them what BluRay can do, but I think it would be lost on them.

haha, thats great. MY GF's dad is very up on tech and he still doesnt maximize his BD player either. It does take a lot of work, thats one of the draw backs and things that stunts BD growth too. Its not like DVD and VHS where poeple could pick up a DVD and see the improvements as well as functionality right away regardless of tv or connections. Now we need the right cable, receiver and viewing distance to blow people away.

Its not TOO hard imo, but still work nontheless. Most living rooms are probably 12 feet from their tv so the 360 on demand or HD TV shows look the same to people with BD players, which will indeed hurt BD. But theres still a huge chunk of people that just like convincing themselves they have the best of the best so they will go with BD.....hooked up with component cables, haha.

I wish BD players shipped with HDMI cables and HDTV's all came with pamplets like the link i put up earlier.

A lot of people miss out on better picture and sound just based on lack of proper marketing to be honest, i wish it would change but its tough to do.

I have had people give me these big speeches when they got their new HDTVs......"Oh, the picture quality is amazing.  You feel like you can step right into the screen.  It's like looking through a window.  Etc. etc."  Then I go to their house to find that they have it hooked up to absolutely NOTHING that's giving them an HD picture.  Which tells me that they only bought an HDTV because it's the thing to do, but also that they are just telling me things they have heard OTHER people say about HDTV. 

EXACTLY. People argue that DD will kill BD, but the thing is, like you mentioned, its th epeople that dont really know better that will keep BD above DD because they think theyre getting the best of the best.

Whereas the people that know whats going on will use DD for their benefit, like you seem to be doing, and i do. I usually buy BD's for my favorite films for the bonuses and for the Audio to be honest, all other things ill just rent in HD.

You mean a PS3 will decode the audio but a standard Blu-Ray player won't?  I have my 360 and Blu-Ray player connected to my Dolby Digital 5.1 sound bar via digital optical cable.  I forget what I did, but I know I messed with some audio settings on my blu-ray player when I first got it to make sure it was outputing the correct audio.  Yeah it's a sound bar so it's not technically "true" surround sound, but I live in an apartment and my TV is only roughly 7' away give or take so it's all I needed for now.

I'm not sure if I fully agree with that chart... or maybe it's just because I'm a videophile by nature thanks to computer gaming... but I can defenitely see a huge difference in 720p to 1080p from about 10' away... and I don't need an 80" screen to do it...  I guess at about 7' away my optimal screen size for 1080p would be about 50-55"... which to me seems a little big.  I am getting a new 47" HDTV in about a week or 2 and I feel that the upgrade to 1080p on that screen will be perfect.  After all, I'm used to having 1080p on a small 24" screen and it is still very noticeably better than 720p to me at a viewing distance of about 3-4'.

If any of you have any tips on a good 120hz set that actually does true 120hz very well, let me know.  Basically I'm leaning on just getting a budget 120hz set for about $1000 and not really using the feature until necessary since 120hz really doesn't improve much in most cases and sometimes worsens things...

Some BD players decode Dolby TrueHD, in fact i think most do but some disney movies i think and others offer linear PCM and ive seen some lionsgate movies with DTS and fox as well. And i know next to nothing about sound bars but so im not sure how it would effect the audio at all but i do know one thing. When im watching a BD with Dolby TrueHD or PCM or even DTS my settingon my receiver need to change, i need to have my volume much higher because if i dont it sound too wimpy, but with it higher i can tell the difference.

Honestly though, i wouldnt even bother with audio until you have a place where you can get a nice 5 speaker set up, dont listen to magnolia best buy employees, 7 channels is useless unless your living room resembles a UFC ring.

http://www.amazon.com/Sony-BRAVIA-KDL-46V5100-46-Inch-1080p/dp/B001T9N0EO/ref=sr_1_9?ie=UTF8&s=electronics&qid=1260207163&sr=1-9

This TV is one of the best especially for the price i think for the situation. Youve got 7 ports so no worries about if you ever get new systems or a receiver in the future. Plus the 24p cinema is a nice bonus for having BD.

The problem with 120hz though is that it doesnt do great justice and osmetimes can cause poor image quality, sort of like how some BD's have edge enhancement than kin dof washes out the image. If youre watching nascar or even football it may benefit, but for BD's or Zune on demand i dont think it would help that much to be honest, you could probably get a better tv for cheaper without it.

Also, youre right in line with 47 inches for 7-10 feet for 1080p, you should be ifne.

Another thing though, that charts kind of hard to read since they have partially fille din centers, but 3-4 feet viewing distance it says youll see a big difference between 720p and 18080p so your experience is right in line with that. and 80" screen is 1440P , i dont know if youre reading the chart wrong or just slightly exaggerating, but for 10 feet a 47 inch tv will show you a difference, the charts not scientific and obviously, as long as you feel youre seeing better quality by all means go with it.