According to Smarthouse Microsoft are working with Toshiba on a new Xbox that will be positioned as a Entertainment hub.  The report says the new devices will include a HD-DVD drive, hard drive and possibly dual TV tuners with EPG. This all in one device would have its own Media Center type software enabling it to compete with a tuner enabled PS3. The post says "a spin off from its struggling media centre offering." (I am not sure where they got struggling from)

The new Xbox device, while allowing for extensive gaming capability, will be positioned as an entertainment hub that includes gaming and extensive wireless networking capability as well as 1080p playback. There is also talk of it including a dual HD TV tuner and EPG capability and a docking port for an MP3 player. For Toshiba, the device is critical if it is to be successful in beating Sony and the Blu-ray promoters.

Would you prefer a all in one Xbox devices with Tuner cards or a centralized Windows Home Server with Media Center Server built in and then user Extender devices to consume the content? I think putting the tuner cards in the Xbox would work for some people but I would prefer my tuner cards in the server and then Extenders, Xbox 360s and other PCs to be able to stream Live and Recorded TV from the server.

What do you think?

Read the article for more details.

Toshiba Working With Microsoft On New Entertainment Xbox - Smarthouse

Via eHomeUpgrade