[quote name='ampd413']You can't play online games with the 4GB I guess, unless you get the 250GB hard drive which is $150. So, I would suggest getting the 250GB system if you plan on using online or downloading anything.
Also, don't get the target insurance. I would get insurance from squaretrade.com - I got 3 years for my PS3 for $35-40.[/QUOTE]
That's completely untrue, you can play anything with the 4gb, you're just extremely limited on how much stuff you can save. For instance, I do remember that the Lost and the Damned expansion for GTA4 is over 4gb just by itself, so forget about getting any dlc that big. I don't know the size of any other dlc packs off the top of my head, but most are several hundred MBs, so you would only be able to hold a few, plus any videos, xbla games, themes, and game saves you may have.
Now, you can always get a USB flash drive to save more stuff (I stick to Sandisk; some brands are not compatible with the 360). A 16gb runs about $30 on amazon, but usually much more expensive in stores. That's a pretty good solution, but I had a 20gb 360 launch system, and after several years of collecting data I finally had to get a 120gb hard drive. I'm currently using over 50gb worth of space - nowhere near the 250gb limit on the new systems, but far past the 20gb you'd get with a flash drive + 4gb built-in.
You could get a 32gb flash drive, but that's over $50 and some have problems when you get into that big a drive. And for the price you might as well just get the 250gb.
Really it just depends on how much you will use the system, and how much DLC you expect to download. Good luck!