The Xbox 360 is smaller than the original Xbox, and its wireless nature makes it a natural fit in the living room - marking a thankful change from standard gaming consoles of the past. Despite looking like the offspring of an iPod and a DVD player, the Xbox 360 is still very much a PC on the inside. As such, it's got all of the components we're used to.

The $299 core system gives you the same console (with a white DVD tray cover), a wired controller, and standard composite AV cables; there's no hard drive, headset or remote.

By now you have undoubtedly heard about the massive external power supply that comes with the Xbox 360 and you can see it in the lower left hand corner of the picture above. Remember that in the original Xbox, the power supply was internal. But with the power requirements of the Xbox 360 being significantly higher than its predecessor, while featuring a noticeably smaller case, the only solution was to take the power supply out of the Xbox 360.

HDTV Support
With the Xbox 360, Microsoft hopes to usher in the era of HD gaming, first and foremost by requiring all Xbox 360 games to support 720p (1280 x 720). Unfortunately, we have yet to hear from Microsoft if this means that all games must be internally rendered at 1280 x 720 or if they can be rendered at a lower resolution and upscaled later on. There have been discussions involving at least one Xbox 360 game (Project Gotham Racing 3), rendering internally at a lower resolution and having the Xbox 360's TV encoder upscale it to 720p.

You don't have to have a HDTV, but obviously owning one will give you better overall image quality. The Xbox 360 supports all of the most popular video formats: 480i, 480p, 720p and 108. There is no out of box DVI or HDMI support, nor is there any Microsoft support for either of those video interface standards at this time, although Microsoft has indicated that they may offer HDMI support when it makes sense to. There is, however, an optical output, but the cable is not included.  If you don't have a HDTV but you have a VGA monitor that you'd like to use, Microsoft does offer a VGA cable that will allow you to connect your Xbox 360 to a VGA monitor. If you don't have a HDTV or a monitor but still want a higher quality output, Microsoft also offers a S-Video AV cable.