Exactly the same with the original Xbox drive. Areas designated for games to use and others for updates and such. Is this a suprise? ... and who actually cares how much of the drive you can use? Who has even close to 12gb of user content on their 360? I doubt there is anyone out there.

Its going to be extremely expensive if he wants to end optical drives with a laptop sized hard drive... 100gb laptop drive is what 150-200$? 500gb normal factor is not much more than that.. with much better performance.

Simple, developers are not allowed to rely on the harddrive like they were on the original Xbox. Every game should function exactly the same harddrive or not. That's what MS is telling developers. The exception to this could be for instance future MMO-type games which could be "HDD-required" for obvious reasons. And of course... there will come a day in the future where they'll probably say to developers that they can make games that require the harddrive. My guess is that something like that would happen closer to the "end" of the system.

First off, I highly doubt there will be many demos reaching sizes of 1gig even. Even if so though... I still don't see the problem. Who would keep 10+ demos around for any period of time?