we should wait for this to be confirmed by a more reliable source...several people have already posted they are having no problems with the 4Gb model and co-op mode.  It is possible that the questionable site was attempting to use a modded slim model and that of course would not be an authorized live HDD.

You can use any of the old 360 hdd's on your slim to alleviate the problem. Kinda sucks but its the only workaround I know as of now. This only affect online co-op btw, not split screen co-op.

Here's a post explaining how to add a fat 360 hdd to your slim

http://www.neogaf.com/forum/showpost.php?p=23323145&postcount=9097

lol

That really sucks, but it is also quite funny.

I have 4GB one and Reach. I will try it out.

Lol...That's all that can be said...Just "Lol"

lol...kinda funny. ITs cheaper to buy the fat 360 than HD for the slim...

But hey...you don't buy a base model car and then complain its missing air conditioning and automatic transmission right? :)

I couldn't imagine a car without Air Conditioning and Automatic Transmission in this day and age even for the crappiest new car in western society. 

(if that was the joke, I am sorry for not being that much of car guy to understand it)

Thumb drives are cheap, so if they want to do coop buy one.  They are less than $20-30 bucks almost anywhere online.

Adding extra storage through USB sticks etc. doesn’t seem to fix the problem.

(I think you have to add those actual storage which isn't even out in UK.)