DLC, XBLA games and installs make a very compelling case for the hard drive.

Go for it would be my advice.

Every single person that's had something to say about installs has said that you'll regret not having them as an option. Just a pointer about making sure you certainly do get a HDD.

I don't see the rush getting a hdd when you can easily upgrade later at no additional cost.

I like my Arcade. MS sold me a used 20 GB HDD for $30. I think you get about 15 GB of space but a lot of the used HDD are buggy so it may or may not allow you to play Xbox games, if that matters to you. Anyway, I'm glad I got an Arcade (for $170). It comes with 6-7 free games. I've DLed a lot of demos and trails. I usually keep the trails and delete the demos after a play or two so I have plenty of room left on mine. 15 GB is quite a bit of space and the Xbox 360 was quite a few good XBL games.

I've heard the Arcade is even cheaper in parts of Europe so that actually does sound like a good deal if you don't have a good PC or a PS3 and want to do HD gaming.

yes the arcade is worth it, my parents got me one and its a great value. i also just got the 120 hdd though because i like to download alot of stuff.

How does that work out?

Get the live starter pack:

http://www.amazon.com/Xbox-360-60GB-LIVE-Starter-Pack/dp/B001HHWFEY/ref=pd_bbs_sr_1?ie=UTF8&s=videogames&qid=1230595364&sr=8-1

Oh, you mean no additional cost over the cost of a Pro system.

Poor wording. I thought you actually meant no additional cost, as in for free.

Yeah, sorry.

The only other difference between the arcade and pro is the Composite vs Hybrid Component/Composite cable, but it makes more sense to buy a 5 dollar HDMI cable anyway. It's a better deal to buy an arcade with a live starter pack because you get the 3 mos live card. The Pro/Elite simply isn't worth it.

edit - I should have mentioned the games they include.  I assumed the OP doesn't care about those