1.- Go for the premium, more soon than later you fill find out that the 20GB are far from enough, especially with the video distribution and the game demo options.
2.- Most of the problmes associated with the first batches of the 360 have been solved already, the dvd drive is noisy as hell, but MS just announce a change in the dvd to make it quieter.
3.- There are no prices drops in the near future, though, there's a new 360 comming out, that will include hdmi out and a 120GB HDD among other things for the same price of the premium.
My advice would be to wait untill this year's christmas so you will get the best bang for your buck, either by buying a new console with lots of extras or buying a cheaper second hand console. Now, if you're into modding the xbox, the best option wold be to buy a second hand consle right now, having special care on which dvd drive it has in order to take full advantage of the exploits, or you can do what i did, get a Wii and have fun with the whole family, i gotta say that i had never had such a blast with a game console as i have now with the Wii.
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