If you're an infrequent user the USB solution should be fine, assuming you have some of them already lying around. Otherwise, I would think that a 80GB drive would be ample. It's easy to get dissuaded though, since the 250GB model is better value for the money.
I've installed every game I've bought, I have XBL games, hundreds of RB tunes and I still have well over 50GB of space left on my 80GB drive. Now, if you buy new games more frequently and install them, you would burn through it much quicker. I have someting like 8 disc games total, plus about 5 or 6 XBL games.
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