Oh damn. Just saw this. Yeah. You're correct. There is a hard drive bay. I have a 3.5 in mine actually where I softmodded it with FreeHDBoot. I have to install some games on it at some point and play with the softmod some more. The disc drive the Xbox uses is actually based off PC disc drives. It's about the same size (3.5 inch form factor). There were a few manufacturers though. IIRC, Thompson, Samsung and Phillips made drives for it. All interchangeable too which is nice when you replace it when it dies. Unlike the 360 where the disc drive is locked to a specific systems serial number for no god damn reason.