It really comes as no surprise that Microsoft is dropping the 320GB hard drive for the Xbox 360S this month. The drive can be used to add to a 4GB system that does not currently have a hard drive, or it can be used to upgrade from an existing smaller hard drive to the new 320GB hard drive.
Of course, to perform the upgrade you will need a transfer cable to copy the contents of your current Xbox 360 hard drive to the new larger 320GB hard drive. If you are going from the older Xbox 360 system that has the external top-mounted hard drive, then the existing transfer cable that it is available will be fine.
However, if you are going from a 250GB internal hard drive from an Xbox 360S, for example, to the 320GB hard drive that will be used in an Xbox 360S system, then you need an “S to S” transfer cable. Major Nelson recently let it be known that such a cable was coming. Apparently, it is not available fast enough, though; Microsoft says that there is limited availability of the “S to S” transfer cable (starting the 20th of this month), and only if they still happen to have some, and only if you call Microsoft customer service to get one. If you are fortunate enough to get one, it will still cost you $20 to purchase. The “S to S” transfer cable is coming and will be available and in stock starting next month.
If you do purchase the 320GB hard drive for your Xbox 360S, you will get a code for the full Lego Star Wars III: The Clone Wars as a download for free just for purchasing the 320GB hard drive. It is unclear how long this deal will last. The 320GB hard drive will retail for $130. From what we hear, for the time being the 250GB hard drive will continue to be available while supplies last. It is unclear if 320GB will be the new standard going forward; but we suspect that this is likely the case as availability of the 250GB hard drive dries up for Microsoft.