1. How easy is it to connect the Xbox 360 to a Wi-Fi network? Out of the box, the Xbox cannot connect wirelessly to a network, but with a $100 Microsoft add-on, it's simple. Yes, $100 extra when you've just spent $300 or $400 on your console, but I have to hand it to Microsoft for making the experience a positive one. Many Wi-Fi devices can't deal with different formats of wireless security (WEP, WPA, etc.), but when I plugged in this accessory, the 360 saw my network and knew what to ask for to make everything work.
2. Can I really connect my iPod or other MP3 player to play music? The basic answer is "yes." As long as your iPod is full of songs you ripped from CD or downloaded without permission, you can connect it and instantly pull up a menu of all its songs. You won't see any of the tracks you purchased at the iTunes Music Store. Because of the way the iPod connects, it isn't able to play protected tracks.
The iPod semi-connectivity is a ray of light in a generally partisan and overly protected musical landscape. What's depressing is that much of Microsoft's own protected content doesn't play on the system, either. For nearly a year, Microsoft's Windows Media division has promoted subscription content that you can play on your PC or on a portable player, after paying a fairly low monthly or yearly fee to Napster, RealNetworks or Yahoo! Typically, you can play songs on a PC and even move them to participating non-iPods, such as Dell's Ditty. What's messed up is that none of those tracks play on the Xbox. Microsoft should have been careful to make sure that this content would be totally playable on the new Xbox, but that just didn't happen. So much for corporate synergy!
3. Can I plug in a camera to get a slideshow? I plugged an Olympus E-Volt E-500 full of shots directly into the Xbox, and got a high-definition slideshow better than any I would see from a burned CD in a DVD player or any other less competent media reader. It's impressive.
The problem with viewing pictures on the Xbox is that when you connect it over your home network to a PC full of family pictures (using free Windows Media Connect software available at Microsoft.com), the Xbox tosses the organization structure of your pics out the window. In my own My Pictures folder, there's a folder for each year, subdivided within with each photographic event. The Xbox lists all photos within your My Pictures folder, but without the hierarchy, so collections of pics from 2001 were listed confusingly alongside those from 2004.
4. How "high definition" is the Xbox 360, really? Truth is, it's totally high-def. If you have an HD TV set, you can see photos and other content (games, etc.) at the sharpest resolution possible. I was happy that it included wires to connect to my high-definition television. It also has a slot for the optical wire that transmits surround sound audio to a full-fledged Dolby Digital receiver, though you need to buy the optical wire itself at RadioShack or some other electronics shop.
5. Do I need to buy the $400 version of the console? Yes. If you are dying to get your hands on the Xbox 360, there's no reason not to splurge on the deluxe package with hard drive and wireless controller. The wireless controller is better than the regular wired one, and the included hard drive is key to playing older Xbox titles, as well as being useful for archiving music.
The best reason is that the current version includes a media remote control. I've played with Microsoft's more advanced remote, as well as Logitech's Harmony remote built for the Xbox, and while both are quite nice, they don't do a whole lot more than the one that's included—for a limited time—in the $400 system configuration. If you can get that remote, you won't have to memorize a bunch of controller commands to play DVDs and music. (All of the remotes suffer from the same flaw, not being able to scroll through long lists of music or other content fast enough, but with luck Microsoft will fix that issue soon.)
Don't forget that, if you have one of Microsoft's Windows Media Center PCs, you get even more capabilities, like TV shows recorded in one room of the house and streamed to the other. Is that the future? Actually, it's all happening right now.