It Can hold a lot of games i have the 4gb and i currently have 4 games on it and only .8 gb have been taken up. It doesn't really matter much unless you buy the game off of the Xbox Network because otherwise you will just be playing it off the disk and it needs room to save.
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How much can the XBOX 360 20GB hard drive hold?
It holds 120 gb worth of games
256mb can hold almost nothing you must atleast have 4 GB
each game is around 1 or 2 gb so it can hold alot
The Xbox 360 can play original Xbox games but the Xbox doesnt play Xbox 360 games.