PS2 could include DVD playback without any additional hardware (by using a normal game controller), so where's the sense in Microsoft abstracting DVD playback off of it's already bulkier system? The answer is "more money."
Ideally the IR module should have been built in to the Xbox to begin with. I would gladly have payed an extra $10 then, instead of what MS is asking for now, which is roughly $30 at most retail stores. Simply ridiculous.
The gadget _does_ do what it is supposed to do (the only worthwhile thing to be said) but altogether is somewhat discouraging for reasons already addressed.
The design of the controller is bulky as well--not sleek like PS2's _optional_ DVD remote control. I have said it so many times that I am getting sick of it: The only failure of the Xbox system eminates from it's choice to require you to buy the ability to playback DVDs.
Since, however, there is no choice in the matter I suppose all of us capitalist sheep will flock to the stores and gladly plop down 30 smack-a-roos so we can watch our DVDs. We will probably also decide to sell our old DVD player on eBay since they are no longer needed, and also to recoup our losses on the Xbox DVD kit. And I suppose too, that while on eBay we will notice the Xbox DVD playback kit being offered for around $15 instead of $30.
Word to the wise: Go to eBay for this gadget. You will save yourself around 50%.