The 360 is fine if you get the updated "Falcon" 360. It has the smaller CPU so it runs cooler. Here is a link to help you if you plan on buying a 360. It will ensure you purchase the updated 360 with the cooler running chip.

http://forums.xbox.com/15804553/ShowPost.aspx

I use my 360 for playing games and the 20GB is more than enough for just gaming. If you would like the ability to download new game videos and game demos then I would recommend getting a 360 with a HDD. Getting a 360 with a HDD also allows you to download new "map packs" and other Down loadable content(DLC) that you would not be able to without the HDD. I download the occasional demo, they are usually around 1.2GB in size, but after you play them for a week you just delete them. After you "set-up" the 360 your HDD will have approximately 13GB of free space after it is configured. IF you plan to download Movies or TV shows I could see getting the new 60GB model, but only if you planned to use it for a media system. Also, supposedly around September the new 60GB model will be $299.