Though it's been rumoured by Bill Gates that Xbox 360 may feature HD-DVD support eventually, Yoshihiro Maruyama, Xbox Japan's chief of operations, has gone on record stating that,
"It's a possibility, but it won't have any relationship to gaming. If the Xbox 360 uses a next-generation DVD drive in the future, it will only be used for watching movies that run on next-generation DVDs. The format for games will remain as [standard] DVD. That's not going to change."
Seems that Microsoft doesn't want to confuse consumers, or make it harder on software developers with many different hardware set-ups. Too bad, because they just made me confused. If the box can take HD-DVD, why wouldn't developers make games to match? Is this just a case of cutting of the HD to spite one's own face?
Rumor: No HD-DVD games for HD-DVD Xbox 360? [Gamespot]