The 'live' chat with J Allard (General Manager - Xbox Platform Microsoft) is over. The server could not handle the traffic and amount of users at all and the chatsoftware had several 'issues' for many, anyway ... here's the full transscript of the Q&A:

[QUOTE]
Q: My question: Can MS guarantee that the HDD will be fully uitilised when present or are we going to see long load times with a slow DVD unit as standard from most developers.
A: just like last generation utilization of things like xbox live and the hard drive will be up to the game designers and just like last time we expect game developers to be excited by this. we have been in clear communication for more than a year that some scenarios will include a disconnected hard drive and it has not slowed them down

Q: Mr. Expert, will the Xbox 360 games use the hard drive for game saves and caching like the original Xbox did?
A: absolutely. we think game designers have all kinds of innovative ideas that the hard drive will be used for. use of the hard drive is not limited to game scenarios. like xbox 1 you will be able to do things like rip and store music and don't forget about live scenarios and all the downloadable content

Q: Why is the hard drive so highly priced? A 20GB hard drive now a days goes for about 20-30... why $100? I believe this will deter alot of sales..
A: the 20 gb hard drive is a 2.5 inch user servicable drive and is more expense than a pc "crack the box" drive. it's one of the reasons we pushed to create a compelling premium bundle.
one of the reasons that we designed a user removable hard drive is in direct response to the hard core gaming audience to make it easier to take game saves, game maps, soundtracks, etc. easily to their friends house or lan party. they also wanted the ability to upgrade to larger capacity drives. and if the drive is not present because someone in the house took it on the road, you still want to be able to use the console for movies, music or games.

Q: will the loss of HDD mean that all games will be made without the HDD in mind, therefore effecting users of the premium pack?
A: absolute not. consider this last generation where somewhere in the neighborhood of 20% of game consoles had hard drives attached. this did not deter game developers from utilizing the hard drive both for exclusive games and cross platform games on xbox. this generation our first party team and our exclusive content developers are just as committed to using the hard drive and like we they demonstrated with this generation our third party cross platform developers are committed as well. games like splinter cell, madden, and tony hawk all demonstrated unique capabilities in hard drive configured systems.

Q: Can we stream videos from our PCs?
A: yes. if you have media center on those pcs. you will be able to stream standard and high definition video.

Q: Why even offer the core package, its seems quite useless
A: great question! the thing to remember that while we designed a no compromises game system, a huge percentage of our customers are not like the folks in this chat room. recognize that more than 75% of the folks on xbox have not played halo. by introducing the core system we are sending a signal to the market that we are committed to this part of the market just like with the xbox 360 premium bundle that we are committed to you.
the significance of this message can not be understated. many of the publishing and retail partners want our commitment to grow the market. and as you have heard from us in our press conferences and such we are very committed to growing the market.

Q: Can you use your Xbox live gamertag for xbox live gold on the 360?
A: absolutely. we want to make sure you can preserve your identity, friends, and investment in xbox live moving forward with xbox 360 and of course you can keep gaming with your identity on xbox 1.

Q: Why not package the Xbox 360 with only the hard drive and a wireless controller for $349.99, so that you can have one SKU
A: good question and one of the many combinations we looked at. with our research with hard core gamers, retailers, and the broader market, we felt like these two configurations were the right starting point. the great news is that the way we have desgined the system in a modular way we can easily adjust these configurations over time.

Q: Will the cables in the 400 package work with my TV that uses A/V Cables?
A: the av pack bundled with the premium pack will work with component and composite cables. this means it will pretty much work with all hd and sd sets out there. the other cool thing is that you can take that cable between high def and standard def tvs.

Q: What is your opinion on HD-DVD?
A: it's going to be interesting to see how and if a high def format for movies plays out. when we designed the the initial xbox many people asked if sacd or dvd audio would be the successor to the cd format for music. as everyone knows the real successor was mp3 and digital distribution with things like napster ipod and msn music. while there is a lot of talk about this in the industry it will be interesting to see what the exact future of this is for movies. of course i think there will be a need for higher capacity optical media for storage applications. we prefer hd-dvd to blu-ray in terms of the flexibility it offers to different applications as well as the infrastructure costs to the market.

Q: Will consumers be able to purchase and download songs or other media directly through the Live Marketplace?
A: not at launch. it is something we would love to get your feedback on. please give us your thoughts.

Q: Will developers utilize the hard drive when one is detected, or will most games be made without using it at all? Will the HD speed up load times?
A: speeding up load times is one of the many things a hard drive can be used for but really it is up to the imagination of the developer. we have been talking with game developers for a while now to make sure that games will load efficiently without a hard drive present. in terms of load times, as a gamer i am super sensitive to how frustrating load times can be which is one of the reasons we put in a dual layer 12x dvd in the system to make sure gamers get great perf with or without a hard drive. one of the challenges with new optical formats when they first come out is the performance of the media which was a consideration when we decided what the optical format for xbox 360 would be.

Q: Can a USB Memory been used by the xbox 360? (I'm asking this because the 360 has USB ports)
A: at present our design for xbox 360 uses the usb ports in a read-only capacity for playing music and viewing photos. if there are other applications that you guys think are interesting then please give us your feedback.

Q: Why doesn't wifi work out of the box?
A: we worked with game designers and talked to hard core gamers and asked them what their top priorities were and the bulk of our investment went into the silicon to the cpu and the gpu so we would have kick **** games. we had a fixed budget and could not do it all. in the end we had a budget and had to offer wifi as an option but we did decide to add "a" as a standard in addition to b and g. we are also compatible with existing devices already on the makret.

Q: will the core system come with a memory card? if not, how can u save games?
A: no it does not come with a memory unit. gamers will need an mu or a hard drive to save games with which is consistent with the games industry for the last decade.
i think it is really important to emphasize especially for the folks in this chat room that we did not design the core system around you guys. similar to the shuffle, the boxter, the 4:3 tv, the 1mpix camera, we designed the core system as a way to get folks to come into the family at a cheaper prices and decide if an how they scale the system. the great thing about our approach unlike these examples is that the core owner can upgrade the system and match the capabilities of the premium system when the time is right for them.

Q: Will a completely black 360 be available?
A: not currently in plan for launch but as you know we will have removable faceplates and i expect down the line we will get feedback that people want other colors and we will provide it

Q: Got a question about the $399 price point for Xbox 360. Feels steep.
A: i think that the capabilities we are offering with xbox 360 are unmatched in the history of videogaming. it's a great value. and the system that most of the folks in this chat room are going to prefer. i saw a posting earlier today where someone looked up the historical prices and capabilities of games systems. it was worth noting that the ps2 launched at $368 (in japan) with no hard drive, no online service, no mu, no wireless, no voice, no network adapter, no remote, and only support for 2 controllers. that's not reason we priced the system this way but it does provide a comparitive frame of referencfe for what you are getting. when you consider you are getting the most powerful games system, best cd player, digital media player, movie player, etc. it's a great value.

Q: Why do they have the core package? Why doesn't MS just release the package with the Harddrive so developers will be able to fully utilize it?
A: independent of the configurations we have at launch it was imparative that we work with developers now to abstract the storage system because (1) the drive is removable and we want people to play even if the drive is not present (2) another possibility is that 5 years from now that you want more storage on the box or on the network and be able to take advantage of that. by abstracting storage in the system we are making sure that all xbox 360 games will work on all configurations moving forward and early customers will be able to take advantage of future scenarios like bigger drives and network storage.

Q: What about backward compatibility in the core system?
A: because we didn't abstract storage in the first generation xbox back compat will require a hard drive. the good news is that the core system owners can upgrade if they deside to update at a later date.

Q: When can we expect an official release date to be announced?
A: this is our last question we are able to take for the chat and then i have one thing i want you guys to know after. answer in short is: stay tuned. just like all of you talking about the system around the clock we are working around the clock to finish the system and the games. we will have more announcments soon.

J Allard (Expert): i just want to thank the community for the enthusiam and passion for xbox since the beginning. conversations like this are super valuable and we would love to do this again.

In summary we tried to optimize launch around three critical audiences
[1] - the game developer - by offering them a no compromises platform with great hardware, tools and the leading online service with live.
[2]- the hard core gamer - by putting together a configuration with everything you would want at a compelling price.
[3] the entry level gamer - that wanted to get into next generation gaming and was excited by the media capabilities and wanted an entry level option

I know the multiple configuration strategy has introduced some confusion and concern with the hard core gamers in particular. hopefully this has helped explain some of the thinking that went into it. if you - like me - want gaming to get bigger and want to see more creative games out there we need to grow the market.

Like the consumer electronics industry or the automotive industry having a family of products (we believe) will be good for the market.
At the end of the day, you guys make xbox a success and we designed xbox for you and dialogs like this are what have gone into the xbox program to date and will continue to give life to xbox for years to come.

News-Source: http://www.xbox-scene.com

(Shark2th comments: Note some of the things being said here like a user servicable hard drive and the ability to upgrade to a larger hard drive. Facinating!)