HD-DVD is Microsoft’s preferred format, and following Sony’s inclusion of Blu-ray in the PlayStation 3 the Xbox 360 is fighting back with this latest add-on. At $220, it’s much cheaper than other HD optical drives and the good news is it will work with a PC – the only other place we’ve seen HD-DVD so far has been in Toshiba’s Qosmio notebooks. Like them, this is a strictly read-only device.

As far as the Xbox 360 goes, it’s a case of making sure the Xbox is fully updated, putting the supplied driver disc in the DVD drive, then plugging it in via the USB port. The unit has a two-port USB hub on the back. When it comes to plugging into a PC, it’s not as straightforward as connecting a standard DVD or CD-ROM drive. Under Windows XP, it’s recognised as a normal DVD drive, but claims any HD- DVD that you put in is corrupt. In Vista, it’s correctly recognised as an HD-DVD drive and you can browse its file structure, but you’ll need playback software to actually play the content in either XP or Vista. This is very thin on the ground at the moment, but we successfully used a copy of CyberLink’s PowerDVD Ultra. XP also needs a set of modified drivers, which you’ll find online.

There are some other downsides – ironically with the Xbox, which doesn’t have HDCP (High Definition Content Protection) compliance or an HDMI output (although the new Xbox 360 Elite has both). If the industry moves towards using this, current Xbox 360s will either downscale or refuse to play the video at all. PowerDVD also insisted on either an HDCP-compliant graphics card or using a sole analogue output – it’s not yet clear whether this is a limitation of the drive or the software, but it would be wise to avoid investing in HD without having an HDCP-compliant card and monitor/TV.

You’ll also need a fairly high-end processor, as decoding the HD signal is computationally very expensive – our test Core 2 Duo E6300 was borderline, and 512MB of graphics RAM is also recommended. But we have no complaints over image quality, with a side-by-side DVD vs HD-DVD comparison showing a marked improvement.

There’s no denying that this is a good-value option, and you also get an infrared Media Center remote control thrown in. If you want to go down the HD DVD route, and your PC can handle it, it’s a must-buy.