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XBLA all the way.

Braid, Castle crashers, Geometry wars 2, Catan, N+, Ikaruga, rez hd, soul calibre etc etc XBLA is really the best thing about the 360. Cheap fun games ftw.

In regards to retail games, everyones said them all really. Make sure you pick up fable 2, TLR, Star Ocean etc when they get released. The 360 really has a huge library so your not going to have any trouble finding good to great games to play. Plus since its older then the competition you'll be able to find lots of really cheap games aswell (such as kameo).