Your next cable box: The Xbox 360?

Microsoft says it's finally ready to bring Internet protocol television to the Xbox 360, but the service is so limited that there are hardly any advantages over a traditional set-top box.

Joystiq got the scoop on the IPTV service, which was introduced at the Consumer Electronics Show in 2007 and could come to the United States through AT&T's U-Verse service later this year. The Mediaroom 2.0 software would effectively turn the Xbox 360 into a set-top box for cable programming, also acting as a DVR.

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But here's the catch: The Xbox 360 isn't equipped to deliver IPTV on its own. It can only act as a "node," meaning that you'll need another set-top box elsewhere in the house, or a Windows 7 PC running media room, to send the content to the Xbox 360. DVR content is written and read off that main device as well, so nothing is stored on the Xbox 360's hard drive.

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Also missing is the ability to enter "Party Mode," a relatively new function of Xbox Live that lets online users watch Netflix movies or SkyTV content (in the United Kingdom) together in a virtual space. You can still engage in live chat with other Xbox Live users, they just won't be able to see what you're watching.

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Essentially, the Xbox 360's Mediacenter 2.0 will save the necessity and cost of having another set-top box. It'd be great to use the Xbox 360 as a replacement for the cable box, while also gaining some extra features that use Xbox Live or otherwise aren't possible, but right now it's just not meant to be. For what it's worth, I'd rather see Microsoft forget about being a cable box and work on Web content instead.

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