The lack of a built in hard drive has forced development problems on a number of games, not the least of which is what GTA4's developers have been talking about for ages.
Forgoing that, what *could* have some of our best games have been like if they were designed with the knowledge that everyone *would* have HDD's? Would Oblivion have been a smoother experience? perhaps without having to load to go in and out of cities?
The only real upshot to having a removable hard drive is the fact that you can 'upgrade" the hard drive, with highly overly expensive Microsoft products.
A high definition disc would have been nice, but that might have pushed back the release fo the 360, as well as given developers more room to fill out games, etc. But the fact of the matter is that the high definition media tends to load more slowly, and, in general, all that extra stuff they *would* have put in, is usually given as add-ons (with the sorrowful addition of a price tacked on - but hey, at least it gives the developer's incentive to continuing to support a product LONG after its initial release, as well as give you extras that you might never have gotten with the disc, such as large numbers of extra levels, or tracks, as well as entirely new campaigns, etc. These do happen already, even without the XBL Marketplace, but they would be far less frequent, IMO, without it).