I have a Xbox addon and don't have a HD-E1.
However from what I've read on here and experienced, I don't think you'll notice any major differences in PQ or SQ between the two, but the HD-E1 is I believe pretty good SD player, The Xbox I presume just average. Some people have noisey Xboxes too, which they find distracting during a film.. and most prefere the option of a standalone player..
Bascially if I was you, I'd decide if I wanted a stand alone player or an Addon rather than basing your decision on the PQ/SQ of either..