"Not a lot of detail on this yet, but Peter Moore has just announced at Bill Gates' CES keynote that there will be an external HD DVD drive for the Xbox 360, and that it will be released this year. We've heard rumors on this every which way, so anything less than an Xbox exec saying it straight out wouldn't have convinced us. So now the question is, HD DVD games or no HD DVD games? Moore says 'the new drive will offer millions of Xbox 360 owners the ability to easily enjoy HD DVD movies and will provide consumers with even more choices for experiencing high-definition content, in either physical or digital form.' But they've been so tricksy on this one, it's hard to pin the drive to straight movie playback at this time."
Looks like Xbox 360 just might be able to compete with PS3. Now if this isn't proof MS rushed the 360 I don't know what is.