I actually think they have a good point about ICT, there will be a large installed userbase of component only tv's for a very long time, add in the 360 HD-dvd drive and you've got a great number of people who can't support HDMI. It just won't make financial sense for studio' to use ICT, if ever. They are going to stuggle enough to get people to buy HD discs without crippling them to start with. Besides MS comitment to HD isn't only the addon drive, they have financial stakes in many other areas, they certainly know more about what's going on behind the scenes than we do and wouldn't have released a analogue only drive without being certain it wouldn't be a problem.
Worrying about a digital connection is pointless too, it's entirely down to your display. There is no technical reason why an analogue signal shouldn't give you just as good a picture as a digital one. In fact some tv's will even give you a better picture via analogue than digital. Although it can also be true the other way around! As I said it's all down to your tv.
The audio codec support is a bummer, but seriously if your going to be wanting to experience eveyrthing that the new HD formats bring surely you'll be using a standalone drive and won't be relying on a console addon! I can't see anyone who has the equipment to support Dolby Digital Plus and TrueHD using a console!
It's just a cheap way to get into HD, if you need to worry about HDMI 1.3, Dolby TrueHD, ICT buy a standalone this isn't for you.