Well I noticed it was almost Christmas around here and a lot of people want a Xbox 360. So I decided to break everything down for the people who want a 360 but do not understand all the packages.

 Notes:

* The Core model has been discontinued. The $199.99 price tag is based on the GameStop refurbished price.
** See explanation below

*** Hard Drive required 

 Zephyr, Falcon, Jasper … Can you explain all these different chipsets? 

Zephyr is the name giving to the first upgrade of the Xbox 360's motherboard, which started showing up in retail consoles July 2007, and sported an HDMI 1.2 port and an improved heatsink.

The Falcon chipset will sport a smaller, 65nm CPU — theoretically, this means cooler temperatures and less energy usage. These chips are expected to find their way into consoles by the end of this year. The rumored Jasper chipset isn't expected until August 2008 and will reportedly feature a smaller, 65nm GPU.

Except for checking for an HDMI port (included in all Zephyr and later chipsets), there is no easy way to tell which chipset you have.

  "Microsoft has no intention of telling you which box has 65-nanometer chips on the inside," Dean Takahashi (Mercury News) said. "All Falcon-equipped Xbox 360s have HDMI ports, but not all HDMI-enabled 360s have Falcons. I really don't know how you're going to be able to tell the difference. If you're buying an Xbox 360 without HDMI, then for sure you aren't getting Falcon," he said. 

Why isn't the Core or Arcade model backwards compatible?

A hard drive is required for backwards compatibility, both for holding the emulation software and to act as a storage space for original Xbox games to use (remember, the original Xbox had a hard drive). It's important to remember that if you buy an Arcade or Core SKU and want to be backwards compatible (or just store more than 256 MB), all you need to do is buy an HDD from Microsoft at your local Video Game seller.

So there you have it. Thanks to Joystick for some of the info.