Microsoft will be releasing an update to allow the x360 to output at 1080p:
http://www.engadget.com/2006/09/20/xbox-360-adds-1080p-hd-dvd-drive-for-november-17th-in-japan/
http://www.engadget.com/2006/09/20/xbox-360-adds-1080p-hd-dvd-drive-for-november-17th-in-japan/