The Xbox 360 supports high bitrate HD H.264 video streams using a special GPU accelerated video decoder. Most modern systems have little trouble supporting 1080p video streams because they either have much more powerful CPUs, or dedicated decoder hardware.
Unfortunately, the Xbox 360 lacked both of these, and the GPU lacked modern compute functionality, so significant engineering was necessary to support these streams. I assisted with GPU optimizations of this decoder in support of the HD-DVD hardware accessory product.