Microsoft execs have complained that iPod isn’t ‘open’ enough – but that hasn’t stopped MS engineers from working around the iPod by leveraging some of the iPod’s functionality and making it – sort of – compatible with XBox, albeit in a limited way. For instance, you can play Project Gotham Racing 3 on the XBox 360, and switch the soundtrack for something on your iPod, which plugs right into the USB port. You can’t use FairPlay AAC songs bought from the iTMS, but you can use unprotected AAC tracks, as well as MP3s.

What’s more, the 360 recognizes the iPod for what it is, and you can browse albums, artists, custom playlists and so on. Via – Insanely-Great