I have a RE5 Elite Xbox with a 120GB drive. After pounding it for over a year, I still have over 75GB free. I'm sure I can clean that up by removing tons of demo's and movie trailers. Do you really need to rip every xbox game to your console? I have over 60+ 360 games, and have ripped very few to the drive.
However, with 1TB drives under $99, I just find it goofy that they make the 250GB sound like its great. They could easily release a 1TB drive in their special caddy for $199 and make a profit. What's next? A USB powered Blue Ray?