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If there's no other differences between the 20gig machine and 60gig, might as well get the lower priced machine and throw a 250gig when they learn how to hack it, like my xbox.
500 is what i paid for my original xbox with 3 games and the dvd playback kit. i swore i would never pay so much for a peice of plastic again, it's better spent on something that will last more than 4/5 years