http://news.com.com/Xbox+specs+revealed/2100-1043_3-5705372.html
1/2 way down:
Digital Media Support
• Support for DVD-Video, DVD-ROM, DVD-R/RW, DVD+R/RW, CD-DA, CD-ROM, CD-R, CD-RW, WMA CD, MP3 CD, JPEG Photo CD
• Ability to stream media from portable music devices, digital cameras and Windows XP-based PCs
• Ability to rip music to the Xbox 360 hard drive • Custom playlists in every game
• Built-in Media Center Extender for Windows XP Media Center Edition 2005
• Interactive, full-screen 3-D visualizers
High-Definition Game Support
• All games supported at 16:9, 720p and 1080i, anti-aliasing
• Standard-definition and high-definition video output supported
Audio
• Multichannel surround sound output
• Supports 48KHz 16-bit audio
• 320 independent decompression channels
• 32-bit audio processing
• Over 256 audio channels