Misfit linked me to this
http://www.gamespot.com/xbox/news/news_6090737.html
If this is true, it's bad news for X-box 2.
http://www.gamespot.com/xbox/news/news_6090737.html
Today, it appears those rumors have been confirmed. Speaking to the Israeli business site Globes Online, M-Systems CEO Dov Moran said that Microsoft has indeed decided not to include a hard drive in the Xbox Next's specs. "Microsoft has taken the hard disc out of its Xbox," he said. Moran went on to say "the only thing left will be a CD," presumably meaning a CD/DVD drive.
When contacted by GameSpot, Microsoft representatives deferred to their supervisors, who were unavailable as of press time. However, if true, the news means that the Xbox Next will likely not be backwards compatible, since it would be almost impossible for it to emulate how games dump data onto the Xbox's hard drive.
If this is true, it's bad news for X-box 2.