It's meaningless this announcement, especially considering Microsoft will be providing full support in the OS for Blu-ray also, considering Dell Inc., and Hewlett Packard Company, the two biggest computer companies are supporting Blu-ray.
Unless MS includes a HD-DVD player in the X360, they have ZERO influence in the consumer space, where this battle counts.
MS provides support for just about every peripheral hardware device in their OS' so I don't see how that's relevant? They have to support everything or they risk losing market share to someone else.
That does not by itself exclude them from having an interest in the adoption of, or the success of one format over another.
The point is you won't see Bill Gates making any appearances at any press conferences in support of Blu Ray as he has with HD-DVD anytime soon. They wanted this to make news because public and corporate perception will play a huge part in the coming format war.
By not fully committing, MS has a back door out in case HD-DVD ends up DOA. They will support both BR & HDDVD within their products, but they clearly have a preference as to which one comes out on top.