I totally agree, I went and checked it out during lunch at Best Buy. The xbox deal is not internet only, and the TV is 999.00 at the actual store - so you can walk out for a grand with both items. For my purposes this is a great deal, the tv is "good enough" for playing xbox and dvd's and I'll get the shiny new HD television in the process. I think I'm going to pull the trigger on this later tonight.
Also, Amazon's running a deal for the xbox 360 HD DVD player, if you buy it this week you'll get 7 free HD DVD's, not a bad way to start the collection.