You CAN hook any SATA drive up to a 360, BUT it requres a special adapter and a fair amount of fannagelling to do it. People have replaced the 20GB drive with 100GB 2.5" notebook drive by replacing the drive in the enclosure that clips onto the side of the 360 as there is no room for one internally. It's not worth it IMO. If you're looking to skimp on the price of the 360 by getting the core unit, I'd advise against it beause it's worth the extra $100 for the wireless controller, headset and hard drive. If you're just looking to upgrade the drive for more storage space, then you can use ANY USB 2.0 hard drive. It will let you save anything on it BUT LIVE content. You can store music, movies and game saves there. You can store LIVE content to it as well but will have to copy it back to the 20GB drive to play it.