This is great news, can't wait to play Halo 1 again with XBL support. IMO, XBL has been Microsoft's savior, with all the reliability problems of the console's, it's a good thing they have the best online service. I don't mind paying $50/yr for it, IMO it's a bargain.
I've never had much of a problem with HDD space, as I don't store any music or videos on the console. You can always delete items from Marketplace to make more room, and download them again at a later date if you want.
Sheep, why can't you just stay out of XBOX threads, it's obvious that you hate the console, we get it.