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AFAIK, X3F are mistaken. You DON'T need a mem card for NXE but it won't save your preferences if you haven't got one.

'If you do not have a Hard Disk (XBOX Arcade Console), you will still be able to recieve the update... however any cached data will be removed upon shutdown/restart of your console. So for those with limited bandwidth we recommend aquiring a Hard Disk.'

from:
http://www.vgchartz.com/forum/thread.php?id=44406&start=0