Xbox 360 with Internal HD-DVD Set for 2007?

I'm taking this with a huge grain of salt, because Microsoft has denied that the Xbox 360 would ever receive an internal HD-DVD drive at least a hundred times. That having been said, New Launches is reporting that a revamped Xbox 360 with an internal HD-DVD drive is not only forthcoming, but should launch during the first half of 2007, just in time to provide more competition for Sony's Blu-ray-equipped PS3.

[via New Launches]