The Media page was a lot of fun because the audience was given a full tour. With WiFi connectivity the Xbox 360 can communicate with your home PC network, so all those MP3s and movies you have you can pop right onto your Xbox 360 for watching on TV. Music can be accompanied by a light show (designed, as it turns out, by Jeff Minter, creator of the classic arcade Tempest).

Got an iPod? You can simply plug it in to the Xbox 360 USB port and your music library will show up. Henson proceeded to do so and his tunes showed up on the Xbox 360 as just another folder to browse. Browsing photos is just as easy, and to show this off Henson connected his PSP (!) to the Xbox 360 and his photo gallery popped into the system. You can have your musical selections play as you set up and run a slideshow. Henson pointed out that a Microsoft product was communicating with devices from Apple and Sony - who would've thought?

The Xbox 360 is also fully compatible with the Windows Media Center, a feature that Henson only briefly demonstrated. He took some HD video he'd recorded off of television earlier and displayed it on the screen. Then, while watching TV, opened up the Xbox dashboard to show how you could message friends while watching TV.

The conference moved on to the software that will be available for the new system. Here the Xbox 360 doesn't come out as strong, although a handful of impressive titles were on display. Project Gotham Racing 3 was particularly solid, featuring city tracks so realistic that in still frame I thought I was looking at a photograph. The level of detail that a powerful system like the Xbox 360 can put out is pretty inspiring: the rear view mirrors on the cars actually reflected the rear view, and stands packed with cheering crowds were actually filled with 3D models of people. Toshio Murouchi from Squaresoft also swung by to talk about Final Fantasy XI for Xbox 360, which is on display on the show floor.

The final game shown, which took up a substantial part of the presentation, was Rare's latest Kameo: Elements of Power. Although the characters were exaggerated and cartoony, the level of detail in the world was incredible. During a huge castle siege scene, while fighting dozens of well-animated enemies, birds scurried along the ramparts and dozens of dragons circled around in the distance. To really show the game off, the demo ended with a monstrous fight scene involving thousands of trolls and elves fighting all up and down a hillside, Lord of the Rings style. The scale was enormous.