I think for the 360 HD-DVD player to work you still need to do the little configuration people came up with last year when it was released.
Concerning the DVD Player software preferences, I think it had built-in support for Blu-ray that just has not been advertised anywhere. You can't buy a Mac with Blu-ray built-in yet, so it will probably sit there until a new Mac comes out with the drive.
Why Blu-ray over HD-DVD? Apple is a (managing?) member of the Blu-ray Disc Association.
However, Apple does already build software that exports to HD-DVD: DVD Studio Pro.
Also, reports from last year indicated Leopard has support for both formats out of box... so we'll just have to wait and see. =)