Even though the Xbox 360 HD DVD add-on is discontinued, you didn't expect Microsoft to just give them away, did you? You did? Well then, this $49.99 liquidation price tag should be extra surprising to you. [Xbox - Thanks Daft Punk!]
@robinandtami: I was comparing the output of my HD-A2 vs. the 360 add-on on my 42" HP 4260. It's not a great TV, but it's good enough (when your wife picks the one with what she perceives as the best picture, it's a permission slip).
On regular DVD's, the HD-A2 looks MUCH better, while my older Pioneer DV-563A was OK, but the 360 was the worst. On HD-DVD's, the Pioneer obviously wouldn't play them, but the HD-A2 remained on top. When I switched to the HTPC, The margin decreased, and I'd say for DVD's the A2 was better, but the HTPC was better for HD-DVD's (probably the 1080p support).
It is well documented that the 360 does not make a great DVD player (even here, on Gizmodo [gizmodo.com]) ....though it can be convenient.