According to several reports, Microsoft and Toshiba are now partnering up to create a new xbox 360 system. This new system will feature an HD-DVD drive, 1080P, a larger hard drive, twin HD tuners, new software based on media center technology, epg (electronics program guide) capability, wireless networking, and HD and MP3 docking ports.

This system is scheduled to be released either late 2008 or around 2009 at the CES show at las vegas.

It is also possible that Toshiba will actually brand a version of this system as their own.

*UPDATE*

Toshiba has recently announced that they're not working on an HD-DVD 360, citing that Microsoft doesn't want to defer gamers from its system.

My opinion on this is that either Toshiba or Microsoft had just announced this too soon. It could be as much as two years before we would have seen the players, and you never really know what can happen in that time, with the format wars, etc.

If Microsoft is trying to make gamers think that the 360 isn't going to be much more than a gaming system, they've already shot theirselves in the foot, because the 360 already has these features, not related to gaming:

On-Demand movie rentals
On-Demand series downloads (don't expire like the rentals do)
Plays DVDs
Plays Music
Streams video and music from media center PCs, etc.

They've also announced that this holiday season, we'll also see IPTV on the platform, an EPG (Electronics Program Guide), and PVR (personal video recorder, like tivo or replaytv) functions.

So, it would make perfect sense if this new xbox came out with the hd-dvd player, twin hd tuners, hdmi, wifi, etc, because that's the direction they're going with anyway.

On the slight possibility that the HD-DVD format were to lose the format war between now and late 2008 or early 2009, Microsoft could either ditch the HD-DVD player or go with blu-ray. That's a possible reason why, in our opinion, Toshiba could be debunking this idea.

To make things clear, this new xbox 360 has been all but confirmed, by multiple media reports, even Tech TV. So, it will most likely happen.

What does EPG do?

EPG will be for the IPTV and/or Digita/HD Tuners. EPG = Electronics Program Guide. It's basically like a TV guide on your set top box, pretty much the same as how dish network, directv, and other services use when you press the Guide or EPG button.

It'll most likely also be used to schedule program watching and recording for the PVR functions.

Rumors are circulating around the web again, that MS could be coming out with a new Xbox 360, one with possibly a built-in HD-DVD drive.

Microsoft has announced that they are taking the 360 Elite out of production soon. I suppose there will be no stopping these rumors, until when/if a significant change were to occur (#1: the 360 goes completely out of production in 5 years, or #2: they actually do release an xbox 360 with an hd-dvd drive.)

Things that people really want in a new system:

@Quiter fan
@less overheating (many say the new systems didn't stop the overheating)
@built in wifi (this would be a big plus, because most everyone uses wifi, and their wifi adapter is still $99)

My own additions to that list:

@Wifi controller that comes with recharge kit and battery pack
@faster loading dvd/hd-dvd drive - it's been out a few years. so, it should be possible. I'm not complaining, but ya know, the first ps1 drives were 1x, and then later 2x.
@larger hard drive support - xbox live has now introduced original xbox games for download, as well as the thousands of other downloadable videos, demos, arcade games, etc. 500GB would be nice, but only for people who download a lot of videos and extra content, probably wouldn't even be used for just gamers.

OK, maybe I'm a little more picky, but if I had to choose just one on my bottom three list, for the sake of all gamers, I would choose the battery pack and recharge kit, maybe even an extra controller too.

wonder what the price would be

Apparently, Bill Gates speech at CES '08 was more about making it about his last speech, and then various firmware/live updates coming to the 360, including some pvr/dvr stuff.

There was no mention of an ultimate xbox 360 or HD-DVD at all.