The interview, paraphrased says, "He argued that while there may be hundreds of video sites, most of the activity is concentrating on a handful of sites like Hulu and YouTube. So his first instinct is cut a handful of deals that integrate the Xbox more deeply into such sites."
A deal would make great sense for both parties. Hulu would gain audience and advertising revenue and Microsoft would be able to turn their console into a very formidable video streaming hub.
Obviously there could be no deal at all in the works. We will keep you updated.