"If you play "Project Gotham Racing 3" on an Xbox 360 after the console hits stores later this month, Microsoft invites you to use tunes straight off your iPod as an alternative to the game's sound track.

Officially, the company says the new console can stream music from just about any MP3 player. But during a preview of the next-generation console in San Francisco last month, Microsoft execs talked up the interoperability between iPods and the Xbox 360.

"When you plug your iPod in," Xbox digital-entertainment executive producer Jeff Henshaw told CNET News.com, "the Xbox 360 automatically detects that it's there. You can browse by artist or album or genre or by custom playlist."

However, because of the iPod's digital-rights-management software, the Xbox 360 cannot stream songs purchased from Apple's iTunes Music Store, Henshaw said.

There's a reason for that: Microsoft built its iPod connection without the support of the folks at Apple.

"We do not have an official relationship with Apple for the iPod connectivity," said Scott Henson, product unit manager in Microsoft's advanced technology group. He maintains that "Xbox 360 leverages standard protocols such as USB mass storage to enable iPod support."

Henshaw said Microsoft tried to "engage" Apple in a partnership that would have officially made the iPod interoperable with Xbox, but Apple rejected the overture.

"So we went in and built all of the support we could," Henshaw said. Microsoft plans to release the new Xbox in North America on Nov. 22.

Apple has been pitching a very different approach for those who want to connect to its popular music player. Through its so-called "Made for iPod" program, the Cupertino, Calif., company is attempting to collect royalties from the maker of any accessory device that interfaces with an iPod through its "dock connector."

Apple would not comment for this story.

iPod owners will be able to connect their digital music devices through one of the Xbox 360's three high-speed USB ports. They'll be able to access an Xbox menu that will let them scroll through songs, artists, genres and the like and select songs to play in games' backgrounds. Users will also be able to stream photos off their iPods for playback of slide shows on the Xbox." [more]