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Dunno if this has already been posted, but here's a link to Pachter (has he EVER been right?) talking about 1 TB HDD for the 360 next year...

http://news.teamxbox.com/xbox/20041/Rumor-Microsoft-to-Release-1TB-Hard-Drive-for-Xbox-360/

"I don't see the timing between new release and digital download being a function of anything other than hard drive sizes," offered Pachter, speaking exclusively to GamesIndustry.biz. "I think as soon as we have large hard drives - think the rumoured Project Natal 'new' Xbox 360 with a terabyte of storage in 2010 - we'll have day-and-date downloads."



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder