While the DVD Forum continues quibbling over a new blue-laser based HD-DVD standard, it looks like Microsoft has been busy developing a new video compression method that can show high quality HD video at bit-rates similar to current DVD’s (between 5-8mbps).

This is significantly better looking than MPEG-4/DivX HD video of the same bit-rate. This technology is causing some excitement, as the T2: Extreme Edition DVD package will include a DVD containing T2 in HD, compressed with this technology. Anyone with a fast PC will be able to watch T2 in high def, no pricey blue laser player required.