Major Nelson posted a link on twitter today showing off a tech demo of something Microsoft is developing for streaming video.
majornelson Cool Tech demo of some of the streaming tech we’re developing at MS. (Silverlight required) Emulate network conditions: http://tr.im/pSfQ
Here is an excerpt from the linked site:
Experience Smooth Streaming
The Silverlight browser plug-in allows you to see Smooth Streaming in action on this page. (If Silverlight is not installed, please install it when prompted.) If the Internet bandwidth and video rendering capability on your playback device are sufficiently high, you’ll experience high-definition video playback of the sample content. You will also be able to simulate end user experiences under varying conditions by simulating drops and recoveries in bandwidth. If your actual bandwidth is below 3 Mbps, or your playback device is video-challenged, then you will experience the adaptive nature of Smooth Streaming without needing to simulate a bandwidth cap.
My guess is that this is the tech (or similar) that will be incorporated into Xbox LIVE’s 1080p streaming feature.