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On the upside, the 160GB of memory built into the Sky HD box makes it easier to store more HD movies than you can on an Xbox 360. After all, standard 'Pro' Xbox 360s only have 60GB of memory, while even the Elite model only has 120GB.
Personally I'd still like the Sky HD box to have at least twice as much HDD space as it has, but we're not aware of any imminent plans to introduce a new box with higher capacity, or to 'unlock' the extra 160GB of HDD space reserved in current Sky HD boxes for Sky's Anytime TV system.
Another advantage of Sky's delivery system is that if a film you want to watch is about to show, you can start watching it right away, whereas with the Xbox you'll have to wait for a chosen title to download - a procedure that can take as long as a couple of hours. On the other hand, though, Sky's HD movies aren't 'on-demand'. In other words, you have to wait for them to come round in Sky's preset schedule, whereas with the Xbox's on-demand, downloadable system, you can start downloading a film of your choice whenever you want.
Sky is still apparently planning to launch some kind of 'on-demand' system at some point, but we don't yet have any firm details on when this will appear or how comprehensive it might be.
Yet another benefit of the Sky proposition is that if you record a film from the HD movie channels included in the Sky Movies package, you can keep it for as long as you like, and watch it as many times as you like. The only time you'll find anything like the 'watch once only' or 'disappears after a few days' restrictions found with Xbox 360 movie downloads is if you record a film from Sky Box Office.
Moving finally into an assessment of the AV quality of Sky's HD movie service, the word that best sums things up is, frustratingly, variable.
When Sky puts its mind - or rather, its bit-rate - to it, it can deliver HD delights that at least rival anything Blu-ray has to offer. The best two examples I've seen of this in action were two vintage movies, Zulu and The Italian Job, which Sky showed originally as part of a Michael Caine series a few months back, but which are now repeated sporadically on the Sky Greats HD movie channel.
Sky actually got involved with the remastering of these films into HD, and the results are nothing short of sensational. Both films look unbelievably sharp and detailed when Sky shows them, beautifully rich in colour, and devoid of noise except for any natural grain that might be in the film stock. Even the MPEG block noise that often accompanies digital broadcasts is all but non-existent whenever I've watched either film on the Sky HD platform.