Microsoft recently confirmed their intentions to move away from the bundled memory card that comes with the Xbox 360 Arcade SKU. In place of the 256MB memory card, the new version of the Xbox 360 Arcade will feature 256MB of integrated memory; that is, memory that is built onto the internal board of the 360.

I think this is a bad idea; it is good in Microsoft's point of view because now they will sell more memory cards, but I always thought the idea of a memory card was a good one. Get with the program Microsoft, put a 20GB harddrive on all Arcade models NOW! Solves your memory problem.