if they don't have a HDMI transmitter chip on the 360 motherboard right now, does that mean they can't have HDMI at all? breakdowns of the 360 don't seem to show a transmitter anyway.why can't it just be done in the software on the 360? Firmware drives HDCP on/off on all the HDMI transmitters chips currently which 'apply' HDCP as and when it is need (and often when it is not). Any HDMI solution will need a HDMI tranmitter anyway and if MS want 1.3 there is just no need to do it before chips are available otherwise everyone will be saying why not 1.3. The HDCP bit ain't rocket science.
not going to be allowed then surely? No matter how you send the digital signal out of the 360 (assuming it even has digital video/multichanel audio out capability) it still won't be HDCP protected so will break AACS rules won't it?The transmitter would need to be in an external box yes, probably integrated into a cable array. The 360 will need to communicate with that and provide the secure link but I suspect that should be possible for the 360 to do. Similar to the 360 communicating with the current cables, knowing what is attached. MS have know about this for a long time now. Their current connector seems to have quite a bit of flexibility here.