they DO have a modular design, why do you think the harddrive snaps onto the 360. and yes, you CAN move the hdd inside the shell of the 360, it has been done, but its a super tight fit, kills your warrenty, requires some serious mod skills, and adds heat to the 360, something that system DOES NOT NEED. haha.
also, the optical out is on the high def cable itself right where it plugs into the 360. im not sure if the standard cables have an optical out or not.
*edit* im an idiot, i thought you were talkin bout the hard drive. duh. i need to drink less, and read more.
ok, now for the answer about the hd-dvd drive... TECHNICALLY i think its possible. but i think there is an issue with firmware and running games off the hd-dvd. sooo... yes, you could do it if you planned on not playing games ever again, and only watching hd-dvds. to make it do both you would need to write a custom firmware, or find one somewhere (none excist that i know of)