When XBox 360 is released in a few weeks, Microsoft will be doing two different promotions.

The gamers will be told that the XBox 360 is the best gaming console yet, combining raw power and a huge video card with high definition output. Some new game will be promoted as the best-thing-ever, the way Halo carried the original XBox.

But the more interesting promotion will suggest that the XBox 360 can replace several of the devices in your living room and give you new access to the files on your computers. Microsoft is beating Apple and Sony to market with a living room media hub that is meant to make it easy to start moving music and video around the house.

The promise for XBox 360 is pretty alluring. A DVD player, a built-in (optional) hard drive for holding music ripped from CDs or some photos or perhaps a bit of video. (There’s room for skepticism about whether the built-in software will create files in open formats like mp3 for music – it’s more likely to insist on Microsoft’s WMA and WMV formats, encumbered with DRM restrictions.) Screen displays will be lovely for browsing through songs and photos. Microsoft promises that iPods and mp3 players and USB drives will be able to be plugged directly into the XBox 360. Here’s a site with extensive information and screen shots, and here’s an interview today with Microsoft VP J.Allard about the plans and promises.

Many people are accumulating files on their computers that would be nice to have in the living room. Family photos are piling up on the hard drive but viewing them is awkward. Music libraries are growing and CDRs are cheap, but piles of CDRs titled with Sharpies are pretty unappealing after a while.

Microsoft has two different technologies to move those files into the living room. The names are similar, the explanations are clear as mud, and I see a lot of confusion ahead. Expect a boom in home audio consultants charging a lot of money to take over the process and stop the headaches.

Here’s the best I can do to unravel the mess. I might not have it right yet. Be gentle.

Microsoft has a special version of Windows with extra media features – Windows XP Media Center Edition. (It’s similar to Windows XP Professional but it cannot join a network domain.) The Windows XP Media Center computer holds your music and photos and videos.

One kind of Windows XP Media Center computer is designed to be placed in the living room, directly connected to a television. It can be a digital video recorder (i.e. Tivo), it can do the job of virtually every other audio/video device in the living room, it’s usually designed for PC gaming, and it’s also a perfectly good computer for everything else. Best example: the HP Digital Entertainment Centers.

The Media Center PC can also be in the bedroom or in a closet. Windows XP Media Center does a wonderful trick: it can send a highly specialized terminal services/remote desktop stream to another device, carrying audio and video plus a gorgeous menu system designed for televisions and remote controls.

A “Media Center Extender” is a small device at the other end of the connection from the Media Center PC in the closet. It talks to the Media Center PC and presents the display on the television. A handful of devices are certified as Media Center Extenders – and the XBox 360 will be a Media Center Extender. Here’s more information about Media Center Extenders.

But that’s only important if you have a Media Center PC, and nobody does.

Microsoft has a more or less unrelated technology named Media Connect, a small bit of software that can run on any Windows XP computer. It’s a simple program that runs in the background and feeds your music and photo library to a few devices that use a relatively new standard for UPNP communication. Microsoft released Media Connect 2.0 a few days ago; the most important new feature is support for the XBox 360.

For all intents and purposes, Media Center PCs and Media Connect software don’t interact. They’re two distinct ways to move media around. (There is a “Network Media Access” power toy that purports to connect the two, but you don’t want to go there.)

There are a number of programs that can send media files to the UPNP devices on the market – the Streamium, for example, or the ones listed on Microsoft’s Media Connect page. My favorite software, J River Media Center, works like a charm with many of the UPNP devices; TwonkyVision is a bit barebones and difficult to configure, but it works well and works on multiple operating systems.

The unanswered question is whether the UPNP support in the XBox 360 will be designed according to industry standards, so that J River Media Center or the other third-party programs can send their libraries to it. As of today, no one knows.

Oh, and all of this depends on a functional wireless network in the house, which has its own challenges. I gave up after months of experimenting and ran cables under the house.

Buy an XBox 360 if you can find one at Christmas! Keep your hopes high – but keep your expectations in check!

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