With the combination of an Xbox 360 HD DVD Drive and Cyberlink's newest version of PowerDVD, you can easily piece together a solution for watching HD DVD movies on your PC.
First, install the Xbox 360 HD DVD Drive on your PC using these unofficial drivers. Then buy (or somehow obtain) a copy of CyberLink's PowerDVD Ultra, which supports both HD DVD and Blu-ray. That's it! All done for a price around $300.
Reader James writes in of his own experience:
1) When you simply plug-in the Xbox HD-DVD add-on drive into a PC, the Plug and Play wizard will find the drivers for the HD-DVD drive on the Internet. No need to use "unofficial" drivers.
2) To play HD-DVD's in highest resolution over digital connections, all the components in the chain must be HDCP compatible i.e. you must have a HDCP enabled graphics card and HDCP enabled display.
I have everything up and running and Cyberlink's Ultra is great software!
Press Release [CyberLink]