I dont se why this is poor ms, if its true its a sound move, if its not its rumoring MS should pay attention to an increase in HD space has been needed since games could be loaded to the console unless they feel we shouldnt own many games.

bundling forza with it also makes sense forza has extra content that requires an install, but the main game does not, so die hard forza fans might want more space, and who knows how much dlc will come with that game paradise cities dlc in in excess of 2 gig ... I dont care what line MS execs feed us by this time next year all MS consoles must have hard drives, or gamers will be left behind it was a stupid idea to offer a console with out an HD and i maintain that, it is  a step backwards from last gen.... 

Makes perfect sense. 120GB HDD on NewEgg is only $10 cheaper than 250GB HDD.

250GB Elite is pretty much confirmed.
http://www.joystiq.com/2009/08/28/250-gb-super-elite-360-spotted-in-south-africa-too/

Dare I say "Super Elite" ?

How much is the Elite today in Europe?

Forza means strength in Portuguese.  So its a Strong Elite :P

same reason you don't send FPS to death with modern warfare 2.

GT5 its powerful and it's good, people will get that over forza 3. especially new console owners in europe.

if GT5 were multiplat you might have a point, but unless something has changed, gt, and froza will continue to co-exist. and as for new console owners it will shift this way and that, but i doubt there is going to be a radical earth shaking change just this winter. 

honestly unless your game is terrible it will sell well when cod is is out too. you only move away from pinnacle releases if your game is full of fail, or the market is going to be so sacherated say 4 or 5 fpss in a matter of two to three weeks that it will hurt sales.  

also on a personal note i did not like COD4 or WAW ... i play them with friends when they are over but i prefer the rainbow series of games... and the style of game ghost recon was before it became advanced warfighter/ghost recon 2.

What to do with 250 GB's?

I believe you have it right.   Aside from the fact that 360 owners in the EU aren't going to say, "man, GT5 is just so much better than Forza, so I'm just not going to buy Forza for my 360", there is also the often downplayed fact that demand for a "full" GT5 has been watered down by pre-release versions of the game.  Many people buy racing games simply to satisfy their curiosity regarding what the game will be like as opposed to those who are hard-core racing sim fans.  I'm one of the former... I bought GT4 on the PS2 because the graphics looked really good at a friend's house.  I played it a grand total of about 6 hours, then I was done with it.  Had I been able to get a pre-release version, I would never have purchased the full version, not because it would not have been really good, but because my thirst for experiencing the cool graphics had been satisfied.

So I'm not convinced that the demand for a full version of GT5 will be nearly as high as it would have been if there was only one version.

when you make people pay for glorified demos that is always the risk..... coincidentally it did make me momentarily remember playstation underground, and how back in the ps1 days i waited for those every month, i dare say only a hand full of games i got i had not demoed in the PU ... got me into test drive 5 back when test drive rocked .... made me think that the gt prolog should have been a part of that revived thing thye have online for PS fans cant remmeber the name of it