InterVideo sent out a press release this morning, announcing that the Xbox 360 shipped with their DVD engine software. This software supports DVD Video playback and Windows MCE playback using the Xbox 360's remote control.
InterVideo, Inc. (NASDAQ:IVII - News) announced today that the new Xbox 360(TM) video game and entertainment system from Microsoft Corporation (NASDAQ:MSFT - News) includes the award-winning DVD engine from InterVideo's WinDVD for video playback. InterVideo previously announced the licensing agreement with Microsoft last May.

The much-anticipated Xbox 360 provides consumers with a high-definition gaming experience, multi-channel audio fidelity and high-quality DVD playback, making it a highly versatile entertainment solution for today's digital lifestyle.

In addition to providing standard DVD features, InterVideo's DVD playback software delivers support for display on high resolution progressive and interlaced monitors as well as decoding high definition television content.
If you'd like to read more, InterVideo's entire press release can be found here.