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Xbox 360 will use iPod to provide game soundtracks

But Neil Benson, the creator of iPodcopy, a software package that enables users to move music off their iPods, said making this connection is more complicated than Microsoft is letting on.

"The trick is finding the right files," Benson said. An iPod "scatters the music files across random directories and renames them, so they're really hard to find." iPods have a database that cross-references the location of music files and their names so users can select them through the device's menu. Microsoft would have had to include simple software in order to engage that database, he said.

"They have to read that database to get a list of songs on the iPod and present that to the user," Benson said. "Once a user has selected what song to play, then you use the database to find the song and play it."

Stealing Apple's thunder?
In any case, the iPod isn't the first Apple connection to the Xbox 360. Because the new videogame console uses an IBM chip similar to the G5 in Apple's Power Mac, Microsoft used the Apple desktops to test out early Xbox titles.

Some industry observers are applauding Microsoft for designing into the Xbox 360 the ability to stream in music.

"I think it's one of these things where these game systems are becoming more and more like computers in terms of their functionality and their focus on multi-entertainment," said David Cole, president of DFC Intelligence, an entertainment industry analysis firm. The Xbox 360 "is still focused on games, but there's a nice overlap with folks who consume other types of entertainment and music. So I think you'll see more and more of those features added."

But because Microsoft is not working within the Made for iPod programme, Cole thinks Apple may object to the Xbox/iPod interoperability.

"I think it depends on whether Apple sees it stealing any of their thunder," said Cole. "The fact of the matter is, Microsoft has been a big software and services competitor of Apple's. And that might cause Apple more worry than if it was Dell or somebody else."

Richard Doherty, president of analyst firm Envisioneering, went so far as to predict that Apple will fight back once the new Xbox launches.

"We expect Apple will have some retaliation ready within days or hours of the Xbox 360 shipping," Doherty said, referring to potential new iPod firmware or a new version of iTunes that could disable interoperability. "If you have iTunes prior to last May, it may work with the Xbox 360 forever, but if you accept Apple's updates, it may work differently."

For its part, Microsoft said it hopes Apple will not take steps to hamper the interoperability.

"It would be unfortunate if that happened, because people are enjoying the flexibility," said Henshaw. "It would be unfortunate to see Apple inhibit people's ability to enjoy their own music."

CNET News.com's Ina Fried contributed to this report.