OK...I own an XBox 360. To my defense, I've been incredibly disappointed by it. It seriously lacks games. Not something you see written all that much, but it's true.
Just look at the list of most popular available games on Gamespot. Most of these games have been out a long time. Oblivion is still in there and its over a year old. Rainbow 6 and Gears of War over half a year old. Hardly a vibrant scene.
Sure Halo 3 is coming (not that I care) and so is Mass Effect (OK, that would be nice), still...
However, things have changed radically now. The spring update in all its video-playing glory shows that Microsoft is playing a far more interesting game now. Just look at it: Nullriver's Connect360 is actually able now to stream video in H.264 and MPEG4 to the XBox 360. All of a sudden I don't need an Apple TV anymore!
Now my girlfriend gets to watch Studio 60 On The Sunset Strip in DVD quality. It actually looks better than regular TV. Sure, all of this makes sense and it's not like I hadn't heard these things before: the XBox format support, good Mac developers taking notice, bittorrent for HD-TV-shows, 802.11N wireless having enough bandwidth, quad core Macs being nice for transcoding, etc.
It is however something else to actually see it work. On the first go. Without any problems. Stunning.
Sure, on the Mac it is as much Nullsoft's victory as it is Microsoft's, but in a broader sense, it shows that Microsoft's XBox division knows where it is at. The format support wasn't necessary in a strictly Microsoft universe. The XBox 360 already supported Windows Media, what more is needed when you run Windows?
In a larger universe, where Bittorrent uses more bandwidth that the rest of the internet put together, YouTube rules the roost and Apple sells TV-shows and movies at an amazing rate, this is a perfect move from Microsoft. My guess is we haven't seen the last of it yet!
Right, now back to watching TV...