I think the HD-DVD camp is sticking around the 720p zone, and I also doubt that the add-on drive would be priced at $100 or under - but none of that matters right now.
For a *pre* show event, today has been loaded with news, news, and more news!
An add-on drive makes sense in a way; if the format fails, Microsoft can discontinue it and cut their losses. At the same time, it's not as 'cool' or convenient as PS3's integrated drive, but it certainly gets the job done. And IMO it helps keep HD-DVD in the race for now, along with those less expensive standalone players.
What *really* matters is studio support, and in the next couple of days, weeks, months, we should keep a look-out and see if the winds start blowing more favorably for HD-DVD again in Hollywood. If they do, well I think we're back to all-out format war. And if not, well it'll just plain be interesting to see how far HD-DVD gets.
I'm surprised MS did this; I guess I'm not *completely* surprised just because after about the fifth rumor, you say 'ok, maybe this is real.' But all that aside, I guess I have to agree that an add-on is the best way to implement this concept. MS is all abotu hedging risks this gen, while keeping on the pressure.