I got the Xbox 360 HD-DVD player for Christmas. I watched a couple of HD movies and yes, the image quality is a lot better then standard DVD however, I can't say that the difference is astonishing. The real difference is in the details. This is maybe because I have a tube TV instead of an LCD one; don't know. The biggest difference is watching regular TV after watching an HD movie. Yark! I have Videotron standard digital cable and the quality is so bad because they over compress the signal.
The price is right ($200 + King Kong for a limited time) if you already have a 360. One drawback I found so far is the fact that the 360 is a noisy beast compared to a standard player. I don't know if the regular HD players are noisy (or even the PS3) so I can't compare. The other one is that the studios assume that we all have a 50"+ TV because sometimes, it's hard to read the menus (Superman Returns) on my 32" TV, the fonts being so tiny.
http://www.xbox.com/en-CA/Hardware/x/xbox360hddvdplayer/default.htm
Here's the Team Xbox review:
http://hardware.teamxbox.com/reviews/xbox-360/68/Xbox-360-HD-DVD-Player/p1/
Hi-Def Digest provides info and reviews on HD movies:
http://hddvd.highdefdigest.com/