Xbox 360 Fanboy writes:
"As if all the images and videos weren't enough evidence, we've now received official confirmation from Microsoft that new Xbox 360 Arcade units do come with 256MB of internal storage. Speaking with us, a Microsoft spokesperson said quite simply, "We are constantly updating the console's more than 1700 internal components. We can confirm that we are moving to internal memory for the Xbox 360 Arcade. The physical internal memory is the same size as the previous external memory units - 256MB."