Can I Watch DVDs on Xbox 360?

Xbox 360
Microsoft
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Just like the original Xbox, you can watch DVD movies on the Xbox 360. There have been quite a few improvements to the experience on the 360, though.

First off, the Xbox 360 plays DVD movies right out of the box. You don't have to purchase anything extra to watch them. You control everything with the Xbox 360 controller or an optional remote.

The second improvement is that the Xbox 360 can upscale the image so it will look better.

 It will upscale to 480p over component cables, and 720p, 1080i, or 1080p over HDMI or VGA (depending on your TV, of course).  

It has to be noted, however, that the Xbox 360 shouldn't really be used as a primary DVD player. A dedicated DVD player offers more features, better image, and sound quality, and you can get a decent stand alone upscaling DVD player for around $50. You also don't really want to use the X360 (or any game system, really) as your primary movie player because it will cause your system to wear out faster.  The Xbox 360 works as a DVD player in a pinch, but I recommend getting a real DVD player if you plan on watching a lot of movies.