So if I want to use my X2 as a multimedia player at home I won't be able to watch DVD's I have authored myself or CD's that I have legally burnt from itunes. Or even personal backups of legally aquired media.
5.a drive that can play exisiting XBOX disks, DVDs, music CDs as well as special XBOX2 disks (using blu-ray or some other high-density standard to make them harder to copy). Add special features to the drive or the BIOS so that it will reject any disk with a signature indicating that its a recordable media (CD-R, DVD-R etc). This makes piracy even harder and also prevents running of pirate DVDs and music disks.