Francious70
the XBOX does a decent job of playing dvd's,but it only outputs 480i in
the movie mode
my opinion being your TV will be the main attraction-center piece-of your
home theater and more than likely the unit you will keep the longest.
Based on that therory,I would suggest you take the $500 from each and apply
it towards a nice TV of your liking.
you can buy a dvd player that does a good job for very cheap now a days
one of the 'upscaler' (720,1080) output players are interesting
and the future holds "HD-DVD" players also
just my thoughts