There's more and more HD movies (Blood Diamond in HD, and the 2 for 1 horror movies in HD from "8 Films to Die For"coming out of the Marketplace that I would like to download all at once, but my 20GIG HD can't fit all movies plus the current content already loaded. With the 120GB HD, I don't really have to worry about any space issues. Also, I don't have a 1080p TV yet (only 720p/1080i), but having that HDMI onboard is nice to have when I do make the jump to getting a new HDTV. All this stuff and all the cables (component and HDMI) already in the box you need to hook it up for an extra $80 from the Premium.
I got one with the full intention that the video quality wasn't gonna be that much of a difference. Once I set it up I did noticed that the quality was a bit sharper and the colors are much brighter with no trace of "bleeding". I have a HDTV that does 720p/1080i and play most of my games in 1080i resolution which I think shows more detail, more color, and less aliasing. I also have a PS3, and I'm kinda upset that it doesn't have the 1080i upscaling. Here's a sample pic.
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