That's not the only bad news for 360 owners... This was on GameCentral today.

Hard decision on Core 360

We've always advised against buying a Core Xbox 360, since it has no hard drive and now Microsoft is providing an additional reason not to.

It has told massively multiplayer online developers that they are perfectly free to require a hard drive as standard for their games to run.

Not only that but it is considering letting them "degrade" the graphics if you haven't got a big enough drive.
Hmmm, looks like Bill 'Git'es has struck again