Video-on-demand (VOD) is all the rage in TV and games. The BBC’s Project Canvas should initiate open platform set-top boxes in 2010 with elements of IPTV and video on demand streaming services. Sky needs a plan.

Similarly, Xbox bosses desperately need to combat the PlayStation 3 upcoming movie on-demand service that will sit alongside its existing BBC iPlayer interface. It’s expected to include streaming and downloading of 2000+ movies and many more TV shows.

Step forward the ultimate solution: Sky Player on Xbox 360. You’ll find it in the Video Marketplace on your Xbox 360. Once downloaded and various subs paid, (though it will let you watch a random live TV channel as a demo), the interface works in exactly the same way as its host’s dashboard.

That is, quite brilliantly. Spacious and uncluttered, ducking between the live TV channel slots and those for on-demand content is so easy, and so familiar. There’s rarely any delay, save for an occasional wait for the movies homepage to load.

As for live TV, if you pay your subs and go for the entertainment and sports packages, respectively, you’ll get Sky Screen 1 and Sky Screen 2, and ESPN, ESPN Classic, Sky Sports 1, 2, 3 and Xtra.

However, it’s unlikely viewers of the basic package will make much use of the live channels provided; iPlayer-envy is sure to set in. Sky channels include only Sky Real Lives, Sky Arts 1, Sky News and Sky Sports News (so no Sky One), plus third-party channels – GOLD, MTV, Eurosport UK, Nat Geo, Nat Geo Wild, History, Eden, Cartoon Network, Boomerang, Nickelodeon, Nick Jr and the Disney Channel.

The video on demand library is just as easy to navigate, and includes material from Sky One. As usual with Sky, content goes from the sublime to the ridiculous. On one hand there’s exclusive Premiership football and rugby aplenty – as on-demand re-runs, too – while a few flicks away are a stack of Gladiators episodes that cost 98p each. And a lifetime’s worth of Ross Kemp-related material.

For live TV only, it’s possible to watch in a virtual living room. Your avatar, along with your friends’ avatars (if you’ve invited them), sit together on a huge couch staring up at a bigscreen that shows the action. Get a headset and you can talk to your chums, or just click the Emote and you can make your feelings known, albeit in a rudimentary way; for sports TV your avatar can wave, shout, clap or remonstrate over a bad decision, while for movies can express love, fear, or even boredom. Pointless, yes, but fun.

The service works well on a 2Mbps broadband line, though if others are using the bandwidth live channels and VOD do buffer and cut out. There is an option to watch in medium or low quality too if your broadband line is shaky, but this is a last resort; make sure your broadband line is well over 2Mbps meg – 3Mbps should be fine – before considering Sky Player on the Xbox.

Content-wise, Sky subscribers get a similar service to their satellite feed, plus VOD. And if you’ve no Sky subs, there’s a taster trial before you commit to paying a considerable sum: for £29.99 you an get a Sky Player retail bundle pack that includes a month’s access to Sky Sports, a media remote and a 3 month Xbox LIVE Gold membership card.