There was a piece on fudzilla saying that a bunch of new hard-drives had been certified and that a new 320GB or 500GB HDD would be available for purchase within the next couple of months.

http://www.fudzilla.com/content/view/14356/1/

My theory about the next few months is that they will stick with the 60GB starter pack and phase out the 120GB HDD at retail and increase the HDD size of the Premium SKU to 120-160GB so that they can reduce the price difference between the Premium and Arcade SKUs to say $75 as people will not be able to get an Arcade + HDD with the same space/cost as the Premium and they will offer a 500GB HDD in the Elites and have the HDD size unavailable for purchase for the time being.

well, with full game downloads we will need to have larger hard drives.

Yes, please.

Takes the piss for the people who bought an Elite recently though.

Wow thats huge! I wonder whats the price of these new HDD separately.

Is MS is offering larger HDD because they're really trying to lean gamers into DD and soon have alot more full games to download?

Probably! If they want people to use the download service they have to give them the space to store the games!

320GB is more than enough for pretty much any quantity of Xbox 360 games. You could download 40+ games and still have room for all the DLC and Arcade titles you would want.

Edit: Probably somewhere between $149 and $199, hopefully the former rather than the latter.

I'm hearing rumors of 1TB drive for the 360.

I think that was Pachter who said 1TB.

Either way, it looks like the 360 might be getting some HD upgrades.

$199 for a 320gb HD is kinda expensive. I can get a 500gb HD for the PS3 for $84.99.

This is good news..except for one thing. You're going to be charged out the ASS for these HDDs cuz you don't have a choice. Thank god Sony didn't use proprietary hardware for their HDD.