In December, Microsoft released a $US 2,999 Xbox 360 HD DVD emulator that allowed developers to test HD DVD projects on the 360 from a USB drive or networked PC. It was an easy way to check how a project would run on the console without printing endless discs (aka coasters, aka microwave fun).
Now, because timing is everything, Microsoft has released their emulator to the public free of charge (go forth and to with it what you will). Developers who already paid for the program will be refunded.
Xbox 360 HD DVD Emulator - Now Free [A Dullard's Guide via Gameguru]