Comment Misinformation (Score 2, Informative) 435
The drive-less Xbox 360 Arcade unit is cheap ($199) but to realistically use it, you'll need to buy a "Memory Unit" (basically a proprietary USB stick) or an Xbox hard drive.... A 512 MB Microsoft branded Memory Unit goes for $29.99 at BestBuy.com.
The current version of the Arcade comes with 512M internal memory, so throw this whole statement out the window.