To effectively use Natal for current generation games, every game should run at 60FPS. The controller interface would expose a slower framerate which is hidden currently by the analogue sticks, its not a problem for most casual/core gamers who would be fine with the current hardware. Its the same Nintendo Wii vs Gamecube effect. Whilst the Wii is an efficient piece of hardware, and its definately much faster than the Gamecube by a significant degree, it needs to run games at 60FPS and deal with the processor overhead of the new interface as well which is why the games don't look significantly different from the Gamecube. This is a similar situation, to minimise lag and make the whole interface work more effectively they would have to update the hardware to run current games faster to give people the best experience when playing core games. You should note that they have only demoed games which run at 60FPS like Burnout for the media who would notice the latency.
So an Xbox 360+ running all games from the HDD would effectively have over 10* the throughput from the storage medium, more memory bandwidth, more shader performance, more processing power. Everything it would need to run current generation games at 60FPS and even for people here not sold on the Natal interface having every game running at twice the frame rate or a higher resolution would be appreciated by many people. It would also give people much more incentive to use their new game download service for the NXE as they could actually get something positive as a tradeoff for not having physical media.
Tease.
