I was looking through a few of the sites owned by IGN Entertainment and I noticed that Team XBox has a poll asking wither the XBox2 will suffer without a HD-DVD drive. I voted no, but then I was shocked to find 66% said it would (see picture).
Now the statement about hardware power is a little untrue because wither the XBox2 supports HD-DVD or not won't effect its graphical capabilities directly, its available processing power or its online support. The XBox has never had a multi-disc game and already supports upto 9GB, so I don't see a need, but there is the argument however that the more available storage space available the better games will be because developers don't have to put the size of the game as a high priority. Maybe Microsoft has removed the CD-drive completely so it can do digital distribution or maybe they have gotten a better solution, but then we will just have to wait and see.