Part of the HD-DVD (and Blu-Ray) specification is an Image Constraint Token (ICT). What this does is only allow HiDef output if the player is connected to a High Definition Content Protection (HDCP) compliant Display, and you can only connect to those displays with an HDMI. If an HD movie is played, the ICT is on, and you do not use and HDMI, the HD-DVD (or Blu-ray) player will only output the movie at 540p.
Currently there is a rumour of a "gentleman's agreement" among the movie studios not to use ICT yet (emphasis on the "yet"). But if the XBox360 did not have an HDMI connector and studios did begin to use ICT then the 360
would only display movies at the decreased resolution.
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"The problem with any ideology is that it gives the answer before you look at the evidence."
—Bill Clinton
"The greatest obstacle to discovery is not ignorance--it is the illusion of knowledge."
—Daniel J. Boorstin, historian, former Librarian of Congress
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