PCW in the UK, Microsofts European business development difrector for HD DVD, Mark Bennet, demostrated the interactive features of HD DVD at the companies 25th anniversary of hardware products.
At the same time he said that the Xbox 360 will be getting a new HD DVD drive, presumably because the current model doesn't support the interactive features.
Microsoft will also launch downloadable 720p movies in the UK before Christmas. The demo movie had a price tag of 480 credits or roughtly £4 and weighed in at 4GB. Anyone without a fast broadband connection need not apply.
This also explains the upgraded 120GB hard drive, since with 4GB a pop, you'd only need four or five movies to fill up the standard 20GB drive.