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if you haven't logged your 360 onto live yet, i wouldn't be surprised if you could just swap your standard hd out for a bigger one to begin with. the 360 uses a standard 2.5" 5400 rpm laptop HD. swap it out for a 80 or 120 gig one and reap the rewards. now i dont know how xbl tests for people who open up their machines, but if it detects it the same way they detected for the old xbox's, they only check your HD the first time it's on live, and then check to see if it matches every time you log on. case in my point xbl hasn't banned me despite the fact that i have a 160 gig HD installed into the box.
this is a great idea though. this is the future of games imo. no more dumb disc formats, just a massive hard drive to allow you to dl content and use it. i wouldn't be surprised in the future if games were just given their own dedicated flash drives, that you could plug into a PCI-e slot to play.
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