yes you can play an xbox without a hard drive because the game console has its own memory but the memory is small so you will be ablwe to save your games but not be able to download or store music of the xbox without a hard drive
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In short: no. The Xbox 360 has to install an original Xbox emulator program to run the Xbox games. It stores this emulation software on the hard drive.
Yes, you need a hard drive to play original Xbox games because the hard drive contains the emulator that allows the original Xbox games to play on 360
In order to play games for the original Xbox on the Xbox 360 you will need to have the hard drive. This is because the update is downloaded onto it.
The Xbox Arcade is an Xbox 360 and it comes without a hard drive. What you are calling an Xbox 360 I'm assuming comes with a hard drive and if you are thinking of buying an Xbox I recommend not buying the arcade as you cannot save games without a hard drive.
you should always be able to play online without installing a game