Abge - I'd still pay extra for better hardware. I'm a new console gamer - have the silly Wii and finally got the XBox (in part based upon a discussion you participated in a couple years ago...) and I am slipping away from PC gaming in part because of the hardware upgrade requirements to keep my games running at max settings.
But, when I fire up my XBox and put in my "high end" games that are supposed to play to the box's limits, I see jittery video, I see resolution that does not match my PC...and it frustrates the hell out of me.
Like I said, as a PC gamer, I was upgrading graphics cards, memory and then motherboard and CPU on a 2 to 3 year basis...sometimes on two machines so as to keep my wife gaming with me...and usually the hardware upgrade was targeted to a single game.
So, I've no problem with shelling out dollars for performance enhancements. What frustrates me is to buy a system that is crippled from the get go...what the point in a dev pouring effort in to matchinghardware capability if it is so limited anyway (slow loads, jittery, limited resolution...)
My dream: swapable hardware -- plug and play graphics upgrades for my XBox, for example.. Yeah....i guess I'm talking about a PC...except the XBox does function fundamentally different from a PC given it's Op sys, etc - which is good for family/kids.
I totally agree with an SSD - I *despise* spinning objects as a form of memory. And, again, it should be expandable.
what I really want is the XBox to play nicer with other content I own -- such as my music from Google play, or allow me to go to network websites and play video (which requires flash currently). I'm tired of being restricted from playing free content that is either on the net already, or which is own. Grrrr....