360's main advantage is that it's the only console of the three to release the next generation version. They have a year's head start on the other two.
They're still losing money on the 360, but component costs will drop until they are making a profit on boxes. Don't forget, ALL consoles lose money when they first ship. With the original xbox, they never really caught up, but it looks like they will this time around. And with the PS3 shipping at an even higher price, there's less pressure for them to drop prices. As much money as MS has been losing, Sony stands to lose much more. If Sony doesn't get their act together, I could see MS and Nintendo driving Sony out of the video game business.
That's the goal, but so far they have yet to get out of the red on xbox and 360. And "ish"? You seriously just said that?
It does play GAMES at HD resolutions, right? The original post never said it plays HD dvd's.