Not the first time; Peter Moore said that they'd consider it before they released the external HD-DVD drive for the 360.
Could be interesting; a harddrive enabled 360 would qualify for the Blu-Ray Profile 2.0, something no Blu-Ray player except the PS3 can claim. And I don't think the Blu-Ray group would say "no" to MS supporting it, either.
Interesting. MS has flirted with then denied considering Blu-Ray support a few times here and there. Whether it would be a built-in player like the PS3 or another external drive (if at all)? No telling. But its interesting to watch. If they did release a built-in drive, I'd expect to see it on a high-end model and eventually see it trickle down as time went on (much like HDMI).
How would I feel about it? Meh. Not a big deal for me. I'll say going with the external route would be their best bet as they won't alienate current customers plus it would make a good external drive for use with a Windows PC (much like the HD-DVD drive they released).