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Oh man. More big CES news — Microsoft has announced that an “external” HD-DVD drive will be available for the system this year.

I would like to suggest to Microsoft that they never, EVER use this device for video games. Just movies. Because otherwise, instead of having the market split in two (hard drive vs. no hard drive) as it is now, it’ll be split into four distinct groups. Sort of like the Sega Genesis/32X/Sega CD situation, and we all know how well THAT turned out for Sega (hint: they don’t make video game hardware anymore).

Speaking of Sega, something else happened last generation: caught with their pants down when Sony announced that the PS2 would have a DVD drive (and the Dreamcast didn’t), they rushed to create a patchwork solution similar to this. It didn’t work (and was indeed never released).

I don’t really want to imagine what an Xbox 360 is going to look like with an external drive strapped on, either. However, I *do* like having movies in very high definition. Who will win?

HardOCP has done it once again. They have an article running down the process of water cooling an Xbox 360, and with surprising effectiveness and remarkable styling. We had plans to water cool an Xbox 360 for over a year now. Little did we know that not only will this water cooling project be more fun than the original, but it may even be practical. Imagine that. With reports of heat related issues and a heat sink that can get almost too hot to touch after marathon gaming sessions, the Xbox 360 water cooling project now had a sense of purpose. We bought a retail Xbox 360 specifically for this project. The minute we got it back to the [H] labs we tore into it and, with a little help from the fine folks at Koolance, we have put together a water cooling solution that will handle anything the Xbox 360 can throw at it and literally knock your socks off.

The Netherlands - Reports from a game console enthusiast site, apparently verified by independent members of its forum just before Christmas, state that Microsoft distributed to retailers who display Xbox 360 consoles in their store kiosks, a self-booting playable demo disc without incorporating the company’s usual security protection. As a result, .ISO binary images of the disc can be made, redistributed, burned to CD-R media, and played from those replicated discs.

While such an inadvertent release poses no immediate threat to Xbox 360 commercial products, since none were included with the kiosk demo, the existence of a non-secure disc whose binary image can be run from ordinary media, could expedite the efforts of individuals seeking to discover the secrets of Xbox 360’s file system.

A copy of the .ISO image from the kiosk demo disc was immediately distributed via a Usenet newsgroup, by “Team PI Coder” - the same Dutch group responsible for extracting .ISO images from commercial discs, and distributing those images over the newsgroup over the holidays. Although the copied commercial images, when burned to CD-R, cannot be played on an Xbox 360 console, their contents can be examined on an ordinary Windows computer.

An information file accompanying the kiosk demo image contains this rather non-cryptic message: “It seems Microsoft was in such a hurry to get this stuff out that they forgot to set the media protection on this disc. This leaves hackers with the possibility [sic] to hack around with this disc that load from a normal DVDR5 backup!… We hope this encourages all hackers, coders and crackers out there to take up the challenge. Enjoy!” The message contradicts statements by defenders of the practice who say the team is merely practicing its rights to tinker with its own equipment.

Within a day of the Team PI kiosk disc posting, other members of the Usenet newsgroup posted what they claim to be code fragments that make copied CD-R discs self-booting from the Xbox 360 console, though subsequent posts indicate those fragments to be non-functional.

We have received reports that certain XBOX 360 consoles have caused damage to GameFly videogames. Unfortunately, we have been notified that you recently returned a damaged XBOX 360 game. As a precaution, we have removed all XBOX 360 games from your GameQ. Please contact Microsoft at 1-800-4MY-XBOX. Please do not rent XBOX 360 games until you have resolved this issue. In the future, should GameFly receive XBOX 360 games from you that have been damaged, you will be charged a replacement fee.

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Steering clear of jokes about overheating power supplies, one company is claiming to have constructed a watercooling kit for the XBox 360. HEXUS.gaming has obtained pictures of the product, seemingly attached to an XBox 360, though how it works and how it is installed remains something of a mystery.