dbrady,
I know the 360 will also recognize external USB drives, my son was up to visit and we connected my USB MyBook to a 360. It wouldn't recognize the mpeg2 files though.
There are conversion programs that can be used but I'd have to have a 360 to know what video codec it uses and to test, but it can be done and used as a
media server just like I did with my PS3.
Now if anyone can figure out how to get the PS3 to recognize the 360 addon HD DVD USB drive... THAT would be quite the media center!
Again, I don't have a 360 to play with so I don't want to sound biased. Right now HD DVD is riding a high, but I feel both formats will be around for some time to come.
I do know that with the PS3 you can rip CD's to the internal drive with a click of a button on the remote. We scanned and loaded up pictures from the family photo album and the PS3 has an excellent slide show with various playback effects you can pick from... start the slide show, click over to the audio folder, and fire up a CD sound track and sit back and enjoy your family pictures.
Red Kawa also has a free media center that provides video streaming from a PC to the PS3, so you don't have to have an external USB drive if you don't want to and I believe Red Kawa even provides a play list for streaming, something lacking on the PS3.
The interface is very slick and intuitive on the PS3 and the RF remote is $25. Personally I think Sony should have included an RF remote and HDMI cable with the PS3, but Sony can be greedy.
One con is that the remote is RF, so no using an IR universal remote. I'm not sure what the 360 remote is like. I also don't know if they have an HDMI adapter for the 360 yet, an extreme oversite on Xbox's side if you ask me for not building an HDMI 1.3 port right in the unit like the PS3 has.
The 360 Interface looks pretty easy too from what little time I had to play with it, but a little more game oriented, but that's just my initial opinion. I'm on the phone with my son right now who owns a 360 and he said he thinks the PS3 has a better interface and is better all around as a media system plus it already has an HDMI 1.3 port right on the back. The definining factor is going to be if your clients prefer HD DVD or Bluray.
Also keep in mind that the current PS3 is marked down $100 to $499 but it's also being discontinued and a new model is coming out with a 120GB internal Hard Drive. It won't have the complete PS2 chipset rather an emulator for PS2 games, but if you're dealing with adults, games may not be the highest priority. Besides, I just saw Pirates of the Caribean in PS3 format and it's pretty hard to fire up the old PS2 games now!
For people that want all the features I mentioned the PS3 has as a media server, but want HD DVD, wait for the XBox Ultimate to come out. It will be similar in price to the PS3 (around $500-$600) but is supposed to have an internal HD DVD Drive (from what I hear) and the 320GB hard drive as well as a built in HDMI port and ethernet connection. Transfering/achiving DVDs to the hard drive looks to be a bit more involved than the method I outlined for the PS3, but it is definitely doable.
You won't have analog audio out on either of these, but most stand along players don't have full analog out either so I wouldn't be too concerned about that, PCM over the digital out on the PS3 sounds incredible and I have no complaints what so ever.
So again, it all depends on which High Def format they prefer. Unfortunately I don't know enough about the 360 to walk you through setting it up as a media server. I opted to get a Toshiba HD DVD player since their prices are much better than Bluray and I watch my HD DVD movies on the Toshiba, BD on the PS3, and use the PS3 as a media center. As far as upconverting, they both are very good but right now. I think I put a slight edge to the PS3. Now if we were talking an XA2, I think the edge would shift back over to the Toshiba...
With current prices a person can go format neutral for around $699 and also have a complete media center to boot. Cheaper than what some people paid for a stand alone player
