Some form of "artificial intelligence" effect is required in every game where you battle the computer. It isn't real intelligence, though, so I think perpetuating it as such is a mistake. Games make reactions based on user-input. This is nothing special. The Xbox, especially, is a nice piece of obsolete x86 hardware with fancy built-in features that have existed since USB was added to mainboards. I'm pretty sure I had a 166mhz Pentium with on-board USB...

By MS's own statements, the Xbox is gearing up to take a more central media role in the household, away from pure gaming. I'm just not interested in a console hacked together to play media center for $400 only a month before Christmas.