If you have a pretty good CD drive in your computer, you are going to be shocked at how long it takes the Xbox to rip CD audio to its hard drive. You'll probably get sick of waiting around long before you run out of hard drive space.
My friend has his (modded) box on a home network and transfers mp3s that way. If that's an option for you, it's much faster. Also, modded Xboxes with an explorer style program can copy audio or video from data CD-RWs.
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Sounds good. I haven't got one yet. But eventually I will. Plan on getting a Gamecube first, then, probably after Xbox 360 comes out, I'll buy an Xbox, and mod it into a sort of home media center.