"The most interesting, and most anticipated, computer for the 2005 holiday season isn't often thought of as a computer at all, and it isn't made by a computer-hardware company. It's the Xbox 360 game machine, and it's made by the world's biggest software company, Microsoft.

This second edition of the Xbox, which went on sale Tuesday, is both more capable and more refined than the original model. In fact, the Xbox 360 is the most powerful computer ever sold specifically for gaming.

Not only that, but the Xbox 360 is meant to be a multimedia hub. Like earlier game consoles, it can play CDs and DVDs. Like the original Xbox, the new model can connect to the Internet to allow multiplayer gaming with people all over the world. But it also can play music, video clips and photos from its own hard disk or from the hard disk of another computer over a network, or stream music from an Apple iPod plugged into one of its ports.

We've been testing the Xbox 360, with the help of a veteran gamer, and our verdict is that its fluid, movie-like graphics make it an outstanding game machine. It also performed like a champ as a multimedia hub.

But the Xbox 360 has some significant downsides that may cause casual gamers to hesitate to buy it right out of the chute. Chief among these are price and backward compatibility with games produced for the first Xbox.

There are two versions of the new machine: the $300 Xbox 360 "Core System," or a better $400 version, simply called the Xbox 360. The trouble is that the $300 base system can't play older games designed for the original Xbox. Only the $400 model can do so.

For the extra hundred bucks, you also get some other stuff, in addition to the detachable 20-gigabyte hard drive - a wireless controller, instead of a wired one; a headset; a remote control for playing media; and some cables." [more]