As I said early, the choice aspect was choice between formats. MS originally were saying they weren't going to get involved. They are not giving XB360 owners the choice of which format to run on their XB360. What if you want BRD HD movies and Halo3? Why won't MS release a $300 BRD addon as well as a $300 HDDVD addon? Because they don't want you to have that choice. They want you to side with HDDVD.
I dont recall them ever saying they want you to have a choice between BR or HD-DVD. Ever since they joined the HD-DVD consortium, the party line is (and has been) that "Games are games and HD movies are HD movies, you should not be forced to pay a premium for functionality you dont want." I dont see how one SKU with an internal HD-DVD drive compromises that.
Sure they could eventually back off that (and I could see how they could spin it as well) but at the moment they dont appear to have deviated.