I posted this as a comment on Chris Lanier's blog:
There are three questions that need answering before this can happen though. Unfortunately outside of a few engineers at ATI and MS probably no one knows the answer to them. With some investigation there may be some answers out there though. 1. Does the TMDS (which is supposedly integrated into the GPU) support digital output? The guess would be yes on this since there is no reason to remove the functionality since all PC based GPU's have DVI interfaces now. 2. Does the TMDS support HDCP? ATI has just recently starting offering PC video cards that support HDCP, hopefully to support PVP-OPM in Vista. The chances are good on this but not for sure. 3. Can the AV connector on the 360 support digital connections? All the current connections are analog, so it comes down to what traces are available and how they can be configured. It is really a question of how forward thinking the 360 designers were. It is truly hard to believe DVI/HDMI with HDCP was left out of the possibilities with this console since they are mainstream already, but who knows. Also as was mentioned without HDCP there will be no streaming of protected content ever.
It would be amazing to me if the 360 couldn't support a digital connection. However it begs the quesiton, if it can why didn't they release it? Surely there is more of a market for DVI/HDCP than there is for a VGA connector?
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