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As of right now DVD-9 is obviously enough since I'm not aware of any 360 developers that have complained about storage space (Rockstar may have for GTAIV but I'm not sure). If in the next few years the PS3 starts delivering compelling HD gaming experiences that simply can't be created or adapted to the 360 solely because of storage space limitations then I'll say DVD-9 might not be enough.

Even then a relatively large harddrive for consoles (say 200gig) will likely be *extremely* cheap by that time (less than the cost of an average game) and could be bundled with games or sold to make up for a problem of lack of space if there is one.