The basic version will launch at $299 without a hard drive when it arrives in November, but a $399 version will also be available offering a 20-gigabyte detachable hard drive, wireless controller, headset, Ethernet cable, wireless media remote control, Xbox Live Silver membership and a HD-AV cable.

  The $299 core system is being pitched as 'fully expandable' and does come with a wired controller, a faceplate and a standard AV cable. The hard drive will retail at $99.99. 64Meg memory units will cost $39.99. The wireless controller will cost $49.99.

  "With both the Xbox 360 and the Xbox 360 Core System, we're offering consumers real choice and real value," said Peter Moore, corporate vice president of worldwide marketing and publishing for the Home Entertainment Division at Microsoft. "We're bringing true next-generation experiences into gamers' living rooms this Christmas holiday."

  Michael Pachter, analyst at Wedbush Morgan Securities said, "I don't think many people will buy the $299 box, since the option value is high. I think it's a PR play, so Microsoft can claim they launched lower than Sony."

  He added, "I think the pricing strategy is correct, and I think that Microsoft will maximize revenue without gouging customers while maintaining the flexibility to cut price at PS3's launch."

  I see a ot of people already griping about the price of the HD version and I am not sure its good idea to offer 2 versions from the get go, but wait till the PS3 price is announced to go into your sticker shock induced seizure.

  Click HERE for pictures of both Core and Premium X360 packages.