it'll work either way. on disc or on the hard drive. if you are gonna fun the stock HDD for a while you only have about 4 or 5 gig's to play with(8 gig HDD but there are different partitions that can't be used). so disc's are the way to go. get your self a fat HDD as soon as possible, it's really worth it. in the mean time don't just burn raw files, it usually doesn't work, head over to xbox-scene and get an iso making program. DO NOT get xiso, it sux. craxian is good along with some others.