Eh, $200 sounded nice at first but the HD-A1 is already down around $250 used on ebay, under $300 new on ebay, and under $400 from select retail stores as well with a little work. That price should drop even more as the HD-A2's start arriving in the next week or so.
For the price, the A1 gives you HDMI as well as analog 5.1 audio, both of which will pass the new lossless audio formats. The A1 is also the best upconverting player out there for SD-DVDs as well so your old SD-DVDs won't be useless.
With no HDMI the 360 player is stuck as an ugly add-on which must be used over component or VGA and cannot pass high-rez audio, MS is designing this as a player that's already a generation old out of the box.
Nonetheless, it makes a good option for casual AV people that just want to give HD-DVD a try so it has its market and it also has those faster load times which are nice, but I'll be picking up an A1 or A2 in the near future instead most likely.