I don't see why they are downgrading games to be Core compatible. I think the Core has a place, if a game requires more then it should be clearly stated on the box so that Core people know they can't play it without an add-on.
You spend less for the core so your experience isn't as good... Its like buying a house... If you do it right, you can save lots of money but have no perks such as hardwood, cermic tile, granite counters, etc. They are all things you can add, and may want at some point to make your house nicer or add value... So, you end up either buying the add-ons or you live with what you got and admit there are limitations in easy of cleaning, scratching, etc...
The Core Xbox is much the same, you get it cheaper because you don't get the full experience out of the box... Not that you can't get the full experience. It just doesn't come out of the box that way. It is more for casual players getting into gaming, families on a lower income budget, and gamers that want NextGen but can't afford the higher price today. You can get most of the experience without the Hard Drive. Later, they can add the hard drive... It is more expensive that way, but that's the way tier, bundled pricing works. For some people it is the only way they can get in, because of their expendable dollars.
It could be a cost transfer to your kid as well. I don't know if you will play it much to justify the cost, therefore I'll buy you the Core today, but you save the other $100 and buy a hard drive.
I think too much is made of the different 360's... At least they are giving people choices to make or not. Wii you have no choice, you buy it and there are certain games that will never be on it because it does not have some of the NextGen capabilities. The PS3 you buy it and it has lots of leg room for growth, but in 3-5 years it will be max'd and there will be something new out there.
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