[citation][nom]tayb[/nom]Sucks for Sony. The whole blu-ray as an advantage for Sony became a lot less of an advantage now that I can stream 1080p movies directly to my Xbox 360...[/citation]
[citation][nom]D_Kuhn[/nom]You can't stream 1080p movies... you can stream pseudo-1080p movies. Just because a movie starts out as 1080p doesn't mean image quality is the same after it's compressed enough to stream. As I said above... I like streaming netflix a lot, but it's no replacement for Blu-Ray.[/citation]
[citation][nom]tayb[/nom]Sorry. I'll get out my microscope this time and be appalled at the lack of quality in these "pseudo 1080p" movies that I can watch instantly without the need to buy an overpriced and fragile disc.[/citation]
Microsoft has done an excellent job of marketing their numbers to be on level with that of its competition. They started off without HDMI or 1080p capabilities and then just worked them into their units through firmware/software upgrades.
Since most consumers tend to just look at a number when purchasing a product (how many have purchased a vacuum and gone 'Well, this one is 6 amps and this one is 12, the 12 one must be better'), Microsoft has been very successful at staying on level with anything being thrown out there as "superior" in terms of figures.
In all fairness however, the resolution of a movie is blown out of proportion in terms of importance with regards to quality. Really, what matters are things such the codec used, bitrate, colour depth, etc. Streaming @ 1080p is an excellent marketing tool but don't be fooled into thinking its a substitute or parallel in quality to that which you get on bluray. But in line with tayb's comment, most people probably won't notice the difference...heck, a lot of people can't even see the difference between SD and HD, let alone 2 HD sources.
Resolution matters but people tend to use it as the only unit measure for quality HD material which is really short sighted but hey, most consumers tend to only look for the one figure so it'll work for the audience Microsoft is targeting.