There's a video on Joystiq that gives us another peek at Microsoft's Xbox Experience, the Media Center-style revamp of the Xbox 360 interface. As an Xbox owner (albeit now far from hard-core), I'm looking forward to the upgrade. But it's also got me thinking about whether I should replace my old 20GB hard drive with a roomier 120GB model.

Microsoft's announcements at E3 this year confirmed its commitment to downloadable content over Xbox Live. It boosted the movie titles available and inked an interesting e-rental deal with Netflix. The customisable 'Avatars' are a blatant nod to Nintendo's Miis (and the casual gamers they appeal to), while Xbox Primetime promises interactive online game shows that Sony and Nintendo are sure to copy.

Blu-ray snubbed; it's DLC all the way

As the video shows, Microsoft will also be allowing Xbox owners to copy games to the Xbox 360's hard drive to shorten load times. And if Grand Theft Auto IV swallows up 6.8GB of HDD space, anyone with a 20GB drive (like me) is going to need more storage. Especially if you also want to store several full games, miscellaneous game demos, downloadable content (DLC), Live Arcade titles, music and video on it. Even now, I've only got 6.5GB free.

Microsoft is keen to push the Xbox 360 as more than just a games console. Increased storage is key to this 'digital home' vision, hence the roll-out of the new 60GB Xbox 360 Pro bundle that's on sale in shops today.

Blu-ray might well be the best available storage medium for today's mass market, but it could easily become obsolete as broadband speeds improve. If we already think nothing about downloading 1GB game demos and 2GB high-def movies from Xbox Live, how long will it be before we're able to download a full-priced game? How long before we bypass the disc-based delivery system entirely?

Increasing the size of the hard drive enables Microsoft to avoid releasing an Xbox model with built-in Blu-ray. It's telling that there hasn't been a significant redesign of the Xbox 360 for the 60GB Pro. As Tom's Hardware shows, Microsoft has removed the extra memory chips on the underside of the latest Xbox 360 motherboard and doubled the capacity of those soldered onto the top. The tweak apparently trims production costs and improves cooling (another anti-RROD measure).

Reinventing the Xbox 360 as a digital hub

With the ability to update the firmware and reinvent its console, Microsoft can easily push the Xbox 360 towards 2010. We might see Wii-style motion controllers in the future. But dramatic hardware changes seem unlikely.

As Jon Hicks, editor of Official Xbox 360 magazine points out: "Microsoft has a very successful, widely owned console that all developers know how to work with now. Significant hardware changes would throw all that away, so I can't see Microsoft introducing them – the only hardware changes I anticipate are based on cheaper components that would enable a smaller console, built-in extras like Wi-Fi or Bluetooth, or new controller designs that don't affect the core hardware."

Any hardware updates are surely reserved for whatever next-next-gen console Microsoft has on the Redmond test-bench. If there is an 'Xbox 720' pegged for a 2012 launch, it won't significantly improve upon the 360's digital hub talents.

Good all-rounder

The Xbox is already quite an accomplished all-rounder. It can play back CDs and DVDs and can hook up to a PC to stream audio and video files. It has access to online movie rentals (in both SD and HD), video chat, and it supports DivX and XviD playback.

What lets it down is the still patchy nature of the UK-specific content on Xbox Live and the lack of a web browser. I'd like to see Microsoft let me link into my last.fm profile, to catch-up with TV via the BBC iPlayer and to browse inane status updates on Facebook. I'd give my right arm for configurable RSS feeds or pop-up news updates. And I'd really like to see an Xbox equivalent of Sony's forthcoming PlayTV add-on.

In terms of technology, I want the moon on a stick. But in the gaming lull before the arrival of Fable II, Fallout 3 and a second dose of Gears of War, I need more reasons to switch on my console.