I was just on the Xbox 360 Wikipedia page, and I noticed a note on the side under Video output formats that said "Note: 1080p video playback is limited to content from the Zune marketplace" and a link to:
P.S. I found something else that makes nikkas who defend paying for Xbox Live look bad:
Xbox 360 color space fix coming, still no word on restoring 1080p playback
By Sam Byford on January 20, 2012 04:17 am Email @345triangle
Xbox Live's Major Nelson has acknowledged that some users are having problems with the color space on video playback following the recent Xbox 360 dashboard update, and promises that a fix is on the way. The issue relates to black levels and washed out colors in videos, though game playback is seemingly unaffected. However, Microsoft is apparently ignoring separate complaints regarding the console's resolution output — specifically, that the new dashboard artificially restricts 1080p playback to content from Microsoft's own Zune Marketplace. Eurogamer has confirmed that all non-Zune content is limited to 720p output, which seems like a clear strategic move by Microsoft to get people using their store. Additionally, some users are reporting errors that seem to be caused by an HDMI handshake issue, with Microsoft staying mum on this subject too. We'll be sure to let you know if we hear anything more about when the fix may be coming, or what exactly it'll fix.
Xbox 360 color space fix coming, still no word on restoring 1080p playback | The Verge
Even more info at: What Went Wrong With The 360 Dashboard? • Articles • Eurogamer.net
P.S. I found something else that makes nikkas who defend paying for Xbox Live look bad:
Mmm-hmm, Microsoft tried to charge PC gamers for online multiplayer & other Live features on Games for Windows-branded PC games and them nikkas was not having it. Now PC gamers get Live service for free.
