If you want to get the arcade then your eligible for the deal on Microsoft's website where you can get a 20gb hard-drive for $20 which I think is around 10 pounds. That would be the cheapest path to a hard-drive but I would recommend getting a pro if your planning on downloading a lot of things from live.
Also don't forget there's a lot of demos on xbox live so you can always give a game a try and see if you like it before you buy it. And if your into shooters then you can't go wrong with Halo 3, Gears of War 1/2 and Left 4 dead. Ninja Gaiden II, Bioshock,
Halo Wars and Star Ocean 4 are all really good too.
The definitive evidence that video games turn people into mass murderers
