Microsoft is rumored to be coming out with a second version of the Xbox 360 with HDMI output. The Xbox 360 currently outputs analog signals of component video, VGA, S-video, and composite video, and optical digital audio (Toslink) over two or more separate cables, while HDMI carries both digital video and digital audio over one cable. With HDMI the digital audio signal is not optical, but instead electrical, like audio coax.

Currently, the best video output from the Xbox 360 for games and the add-on HD DVD drive is 1080p over VGA and component connections. 1080p output is the highest resolution HDTV signal, and means that 1920 pixels are output horizontally and 1080 pixels vertically with progressive (not interlaced) output.

Many HDTVs which do accept the VGA input do not, in fact, display at the full resolution, but frequently at a lesser 1280x1024 or 1024x768 pixels. One major advantage of the VGA output over component is the fact that with the HD DVD drive playing standard DVDs at 480p, the Xbox 360 upscales the video nicely to 1080p, whereas the component does not upscale, but instead outputs the standard 480p. Similarily, for Xbox 360 games, where most are actually running at 720p and not 1080p, the video also looks great when upscaled to 1080p.

Another advantage of VGA is that an otherwise unused VGA CRT monitor can be used, and depending on technical features, may display the full 1080p video. This works best for monitors 19-inches and larger. For more information about the Xbox 360 and the VGA video modes available click here.

Here at Widescreen Net, our opinion is that the best-looking display (especially at 1080p) for both gaming and HD DVD, is from VGA, and not component, because the VGA simply looks sharper.