No Blu-Ray after all says Microsoft:

"Microsoft firmly stands behind the HD-DVD format as the best choice for our consumers. As we’ve said before, we’re confident that HD-DVD will bring the excitement of high definition movies to the consumer faster and at a greater value. We believe that consumers have signaled what format they want to enjoy high definition DVD and we’re going to follow them down that path. The question of whether Xbox 360 has the flexibility to adapt to consumers’ needs is a different issue entirely. Xbox 360 is a future-proofed system – one that allows us to add features as consumers demand them – as evidenced by our offering of the HD DVD drive as an accessory. Current reports indicating that we have a back-up plan, which includes Blu-Ray support are incorrect. At this point, we’re fully committed to HD-DVD and have absolutely no plans to support other optical formats."

From Gaming Horizon.