I can't tell for sure, but it looks like it may only read the CD layer of hybrid SACD's. On the other hand, if this thing is priced similar to previous Playstations at launch ($300 or so) and it will play Blu-Ray movies (which it looks like it will), we may see Blu-Ray develop a quick advantage in user base. That still leaves the issue of software availability (Blu-Ray would need to at least match HD-DVD in that regard), but it could be a significant factor in the format war. Especially now that the talks between Sony and Toshiba seen to be falling apart.