Apparently for those of you that purchased a HD-DVD add-on for your Xbox 360, you may have noticed a new storage device marked as "HD-DVD" under the Memory section of the System Blade. Major Nelson took the time to clear it up, so I wanted to share his post:

"If you have picked up the Xbox 360 HD DVD Player you have probably noticed that in addition to the unbelievable picture and sound quality, you now have HD DVD as a new storage device section under Memory on your System Blade of your Xbox 360s Dashboard. I have gotten a few emails asking me what this is and more specifically if it can be used to store game content, arcade titles etc. The answer is you cant. You can only delete items from this memory area, not add them. In fact, games wont even see this areaso for the most part youll never come across it, but I wanted to explain exactly WHAT this area is. This memory area is part of the HD DVD spec and it only accessible by the Xbox 360 HD DVD player when using the advanced features of the HD DVD format. For example, if you lay down any bookmarks from the HD DVDs that you rent from from Netflix, then youll use the Memory section of the System blade to delete that content, since it would stand to reason that you don't need the information again since you rented the disc. Unfortunately, none of the current HD DVD's properly tag their data..so for the short term all you'll see is 'Unknown Title.' Remember: Not every HD DVD has the same advanced features, so check the back of the HD DVD packaging (Example) to see what each title supports."

Thanks to Major Nelson for the info.