You don't need a massive hard drive unless you plan on downloading alot of TV shows and you never want to redownload them, which you can do for free btw.
I have 14 disc games, one xbox original, and 3 xbla titles. I download all the patches and free updates for all of them. I've purchased about 5 things of DLC. My 360 is telling me that all of that takes up a whopping 2.1gb.
I've got 2.8gb of demos... none of which i've played in over a month. Some of them are demos for games I actually own now but never erased off the HDD.
What takes up my hdd is videos. I've got 6gb of video. But half of it is stuff I've seen and have no intention on watching again (even if I wanted to I could start watching it after like a 20 minute wait and no repurchasing). The other half is in the process of transitioning to stuff i've watched and will never watch again. Not to mention that the 6gb equates to 520 minutes of content (about 8 hours).
The 360 isn't a PS3. You don't need a massive HDD. Even on the PS3, if it weren't for forced installs you wouldn't need a massive HDD.
20gb is more than good enough if you're just gonna play games and watch movies. Unless you're gonna buy like 80 XBLA games, tons of originals, and have like 300 disc games, you really won't run out of space.
60gb is a good step up if you think you might buy alot of TV shows. But I really mean alot. 8 hours is only 6gb so i'm talking about like having 30 hours of video on your HDD at any one time.
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