Basically I was thinking of games like Resident Evil 4 and 5 when I said Action games.

One of the best things about buying a new system that has been out for 4-5 years is you can get all the games more than a year old for dirt cheap!

Start with things like Mass Effect, Gears of War, Halo 3, Dead Rising, Viva Pinata, Fable 2, Lost Odyssey  and all the other great 360 exclusives that are easily less than $30.

Hum well. As someone who loathes most FPS games as well I feel I might have to recommend a demo or rental of Left 4 Dead to see how you like it. It is a bit more fast paced than RE4, but I get the feeling you might enjoy that. It is decidedly first person, but not a typical FPS by any stretch. Much closer to an action survival horror.

Alan Wake is a good game, however if you are not a completionist or someone who goes back and replays games regularly I would recommend just renting it as it is easily beaten in a weekend by renting it

I buy games thinking I will go back and get 100% when a game drought happens... and never end up going back to them though, lol, Microsoft and Sony have been carpet bombing us with great games for the past year :P

The Limited Edition of Alan Wake is available pretty cheap nowadays. In my perspective the book that comes with it is definitelt worth buying.

And Alan Wake is one of the few games I actually continued playing after I finished it.

I will admit the LE was decent, one of the very few LE's I have bought

Thank you everyone for the recommendations, I feel like I'm going to have a blast with my new console. Right now I'm leaning more towards the 250Gb Holiday bundle with Alan Wake, Tiger Woods and Forza 3 at 250$. Hopefully, it won't be sold out at my local Future Shop.

It looks like the Alan Wake isn't a physical copy..?  Said something about download token?  Digital only?

That is correct. Alan Wake is not a physical copy. Instead a download token (Redeemable code) is included in the bundle and you have to download the game.