The Gamerscore blog, an official Microsoft news organ, lays to rest the rumours that the HD-DVD drive might be required to play future 360 games. According to them the new HD drive is solely intended to play movies, and will not be used to accesss game content. From the article: "Since announcing the Xbox 360 HD DVD Player accessory at E3 2006, we've been clear that it is designed exclusively for playing HD DVD movies. It will not play games on HD DVD. At this point, we haven't seen anything to suggest that next-gen DVD formats offer a better game experience than current DVD. What we do know is that these formats will bring added cost to game developers, disc manufacturing, and could even result in added costs and longer load times for the consumer, which would negatively impact the game experience." This is, of course, not to say another peripheral or future version of the console might require such a thing.
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