On2 Technologies announced in a press conference at CES that XM Satellite Radio had selected On2's TrueMotion VP6.2 video compression technology for XM's in-vehicle prototype video entertainment system. This right after Sirius' announced that they'll be providing video using Microsoft's WMV technology.

According to On2, "competing video codecs failed to achieve" the quality and results XM was looking for.

XM and its automotive equipment partners are demonstrating the satellite entertainment prototype in a new technology showcase vehicle this week at CES. (Anyone got pics of this thing? All I found was the XM video demo from last year's CES)

The new system will be used to transmit video entertainment to satellite receivers in automobiles. The video signal will be used primarily for back-seat entertainment with content that can be either streamed in real time or and cached for later playback.