Before the year is out, British Telecom, in partnership with Microsoft, will announce a deal that brings IPTV to Xbox 360.
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In offering IPTV through a partnership with Microsoft, the telecommunications giant will be in a position to buy Xbox 360s direct from Microsoft, and offer a console fully equipped to watch and record free-to-air, paid and on-demand television content to customers, without the need to pay for a set-top-box. From BT's perspective, offering a games console as its set-top-box, BT customers will have yet more choice, and also the ability to experience the world’s market leading next generation console.
http://www.360-gamer.com/news.asp?id=1347