Hear me out. Thinking about this when either Slim version or Natal launches.
With the recent introduction of using USB flash drives. Should MS stop the sale of a 360 with the HDD and simply sell the Arcade with an included USB drive (say 4GB or 8GB). Sell the HDD drive with bundles and stand alone.
Would allow advertising of Xbox 360 for only $149.99.
Sure hard core gamers would complain, but you could easily just purchase a HDD along with the 360. Yet for most people they dont need the HDD at least on day 1.
Its libraries that sell systems not a single game.