Ok this might sound retarded but i was wondering cant they make dvd's bigger then 9gb for the 360,  if not, why?

I don't think the DVD standard allows for more than two layers (unless the DVD is double-sided, but then you'd have to flip it yourself when the game requests you to).

The only possibility, at least theoretically, would be to update Xbox 360's firmware to read HD-VMDs, but I don't know if that's really possible. That would allow for at least 20 GB of data.

http://en.wikipedia.org/wiki/Versatile_Multilayer_Disc

The amount of Data that can be fitted on an optical disc is limited by the laser of the disc drive. For DVDs this limit is 4.7 GB per layer.

To get more data on the disc you need to make the pit size smaller. Beyond the 4.7 limit they are too small for the DVD laser to read.

Blu-ray drives laser has a short wavelength and great numerical aperture allowing for a tighter beam. The pits size can then be reduced allowing for more data to be stored per layer.