Xbox 360, HD-DVD and lossless audio

No, it won't unfortunately.
Although it can decode the formats, it will only be able to output stereo PCM or downconvert to DD or DTS as before.
The only reason is because people have been whinging about it not having HDMI, when VGA (or indeed Component) is perfectly good.

The only real benefit will be for people with TV's that only accept 1080p over HDMI, of which there are quite a few.

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