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Persistent storage is where extra data you might download from the Internet in the future (supplemental materials, extra subtitles) is stored. It's also where your bookmarks are kept and your preferences (if you have a European HD DVD you may have noticed a prompt for the language you wanted to...

Give it another shot. I upgraded using a downloaded file and the player wouldn't accept the first disc, but I burnt it again to another disc and it worked the second time. Very sensitive to the disc, it seems. Adam