After Toshiba lost the format war and some Chinese manufacturers jumped in with cheap HD-like players and products, rumors indicate a new war between the two giants, Sony and Toshiba. In Japan the press enthusiastically speaks of a possible new DVD upgrade that Toshiba seems to be working on. Main plan behind Toshiba's new production? Killing Blu-ray.
Speculation last week showed that Toshiba's upgrade should match Blu-ray's quality and will be much cheaper. This 'killer' is planned to be available in the far east by the end of this year say several websites. If this new upgrade is cheaper, better and backwards-compatible with standard definition DVDs we can expect a new brawl around Christmas. Currently many see this still as a rumor, but do have a certain hope...
"At this stage it's impossible to say whether Toshiba's digital media silver bullet will also be able to locate Atlantis, cure cancer and make 'Britain's Got Talent - the Live Show' an entertaining use of an evening, but it can only be a matter of time," said Matt Egan for the PC Advisor UK.
If this is true there are still many questions to be answered and lots to be specified.
Funny thing is: I'm always thinking "Nah, this time they will not care about what I say.". But lo and behold, you're on it every time.

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Anyway, IF Toshiba does indeed come out with this by the holiday season, I suspect that the price won't be low enough -- maybe $100 to $150. Now, this will probably press Sony to discount Blu-Ray players to $200 or so by then, still getting some people to buy it by some lame pitches like "true HD", etc.
SO, in the end, if people aren't complete morons and buy whatever is thrown at em (which they just might), I suspect that both Toshiba and Sony will take a big hit on the wallet -- Toshiba won't sell enough to break even, and Sony will be hemorrhaging dough due to the forced discount.
Sounds like a good deal. I have no love for either of em.
"Does it take 3.5" HDDs? If so, how big (500GB, 1TB)"
Yes. Also 2.5" (with the common 3.5" -> 2.5" converter). I would recommend 2.5" myself due to heat and noise considerations. But the majority go the 3.5" route. Noise/heat might also be dependent on the drive/manufacturer.
Size: 750GB work, I've seen success reports. Probably 1TB will also work but I'm not sure. If I remember well, Western Digital should be avoided because the interface placement, on the disk, is not properly aligned with the interface on the PH. Samsung and Seagate, should not pose any problem.
Mind you, the interface is IDE, not SATA.
"Does it do 1080p or just 1080i?"
It swallows 1080p files quite happily.
"Does it play x264 files?"
Yeap. mkv, mp4, etc.
Some caveats:
- DTS sound is not decoder, due to licensing costs. Meaning that, if the file has DTS sound, you either need to have the appropriate hardware decoder or you need to reencode the sound to something else, e.g. AC3. It can be easily done via a specially developed tool (audioconverter by "hearthware"). It's a one click solution: easy and fast.
- some types of AAC encoded soundtracks will also not play. It has to do with some specific encoding parameters, which the PH doesn't like. In this case, the only solution is to reencode. Don't know of a 1-click solution.
You can find this and much more at the official PH support forum: www.networkedmediatank.com
Right now, the key to buying an HDTV is to MAKE SURE you watch it on a SD channel first. The ability to scale SD on HDTVs varies wildly and since so much programming is still SD, this is a CRITICAL test prior to deciding on your set.
If you notice, almost ALL HDTV stores will have all their sets on a HD satellite signal- ESPN, Discover Channel, etc. This is because this shows off the capability of the sets in their element and these HD channels are pretty good quality. If you want a BestBuy or any sales person to freak out, ask them to tune in a local SD channel, or worse yet, some lame SD channel that Dish or DirecTV bundles. They may say they don't know how, but tell them to find someone who can. When they change the channel, ALL the sets change and the situation becomes clear which sets cannot display SD. The nervous sales rep will quickly ask: "Are you done?" LOOOL! Because customers are looking at a wall of blurry sh*t and are like: "WTF" at about half the sets that really suck now. Only a handful will still look great.
If what you say is correct (and I bet it is) this advance will be a very desirable feature for future HDTVS - thanks for bringing this to my attention. 
