Cesar Menedez says that rumors of an internal HD-DVD for the Xbox 360 are not true.
"Saw a few stories online about an Xbox 360 with a built-in HD DVD drive: not true. We have no plans to release an Xbox 360 with an internal HD DVD. What we showcased at E3 was an external HD DVD drive, and we're sticking with that. We've always had a games-first emphasis with the Xbox, but some consumers can build on the platform - like by adding a Windows Media Center Edition PC. By keeping the drive external, we're offering consumers a choice in creating their own hi-def experiences. So: no plans for an internal HD DVD."