You know they'll end up with a tiered model just like the 360 did. That way they can advertise a lower price for the one model (appearing less expensive) yet still offer the premium bundle for those who want the hard drive. As for competing with Xbox Live, it had better be a damn good service. Ever since buying my Xbox I have been quite impressed with the workings of Live; even more so with the 360. There's not much I can really see being added in terms of features though. Personally, I'm quite happy with the Live features ad I'm not really sure there's anything I feel I need that I don't have. Price point may be a good way to beat Live (as Live is rather pricey), but with the projected price of the PS3, I somehow doubt that. Either way, it's great that they've made the move to an Xbox Live type system as opposed to the old system, and I look forward to trying it out. Guess E3 will be our first real look at it. On a random rant...the 360 hard drive though is somewhat of a rip-off anyway. I mean it comes pretty much half full out of the box. I saw somewhere that Microsoft may soon be offering the ability to buy full Xbox games off of the Live Marketplace. If this is true, you'll almost certainly need a bigger hard drive. You'll be bale to fit what...like 4 or 5 games on there before it's full? Sure a lot of people already have the games in original hard copy anyway, but if you're going to think like that why even launch such a service. Of course...it may be nothing but a rumour.