Btw guys, in case someone hasn't already mentioned, it looks like the issue is only going to be temporary:
"Microsoft has told GamesIndustry.biz that the problem is not a permanent one, and hopes that a fix will be available soon."
It may just be a problem with the new 4Gb Slim models not identifying its storage as a HDD. I think all they'll need to do is some sort of update so the software recognises the internal storgae as a 4Gb HDD.