According to Stan Glasgow, Sony Electronics US president, "Sony is in talks with console rival Microsoft about offering a Blu-ray drive for the Xbox 360." For whatever it's worth, the exec also noted that it was having similar discussions with Apple, which has yet to even offer a Blu-ray option on any of its machines. Unfortunately, not a peep was uttered about potential launch dates and the like, but you can rest assured that we'll be keeping an ear dangerously close to the ground.
Great news for SNE. If the price is right I'll probably get one for my 360 (will look nice on my Samsung 46" 1080p :), but I will probably only buy one or two movies for it until they don't cost an arm and a leg (i.e. $20 would be fair IMO).
However, it is probably 6 months away from happening (guess), assuming the deal goes through.
PS Who was on here saying that MSFT and other companies selling Blu-Ray was a reason to sell SNE? Some people amaze me that they still have money left to invest with such lack of basic knowledge of how the stock market and business works. Sony will be raking in profits that go straight to the bottom line from a lot of different companies in the future when Blu-Ray starts really taking off.