This story can only be categorized as the biggest, fattest, most absurd rumor of the month, but a story is floating about the web that suggests Microsoft is working on releasing HD movies over the Xbox Live Marketplace.
The rumor was carried on a site by the name of SHSIBAE, but the original story is now missing.
Kotaku covered the rumor and seems to think that there is a shred of a possibility that it could one day come true.
The tall tale implies that movies could be downloaded on a trial basis for a rental fee of $4 or $5. A purchase fee of $15 or $20 would allow you to keep the movie on your hard drive indefinitely. I can't begin to laugh quickly or loudly enough in response to this story.
The Xbox 360 hard drive is barely the size of a single layer HD-DVD disc - the smallest HD disc format. Even if we accept that HD discs contain additional content not needed for a downloaded version, how many movies could you "own" before your 360's HDD lets out a yelp and explodes? A three movie jukebox that requires deleting movies you paid for before downloading the latest Big Momma's House sequel doesn't exactly sound like the future of home entertainment.
Everyone is admitting that this story is a rumor, but the barest suggestion that there might be any truth in it is completely fantastical. I would love to find that I was dead wrong, if only to believe that anything is possible. Also, a $400 or $600 game machine that competes with $3,000 Home Theater PCs would be an awe-inspiring development. For now, please count my vote on this story as "ridiculous".