Special Report from PC Magazine: Hands-On Preview: Xbox 360: "It's possible to connect an mp3 player via a USB port and play your music on your Xbox 360—even as you're playing a game. Xbox 360 can connect to a Windows XP PC and pull music or graphics files (photos) from it. Connectivity is taken a step further with Windows Media Center and the Xbox 360 acts as an extender meaning that it has full Windows Media Center functionality including My TV, My Pictures, My Movies, My Music, and online spotlight. Microsoft has not only gone from the office to the living room with Xbox, but now, with the Xbox 360, combines the two to present a compelling multi-media solution."
Read the full review for more details on hardware etc.