I'd like the option to do full game downloads, especially on the more popular stuff that I'm very unlikely to trade in and I'll be playing on a regular basis, Halo 3 being a good example.
But I could still see myself buying a physical disc for the majority of games for the following reasons: The 120gb hard drive seemed huge till I transferred my Rock Band 1 data and Installed Rock Band 2 along with all my DLC its nearly 9gb. Add to that some demos and other game installs and I easily brought it down to 50-60 in no time at all.
Another thing is that outside America people actually have download caps, the cap on my line is 30gb and its a decent speed and package where I live. I had to be careful what I bought on steam because its easy to break that 30gb with one or two large downloads.
And finally I'm still not too happy about how the 360 handles DRM, its all rosy while connected to live but gets a bit messy the second you bring your hard drive over to a friends place to show off a new game.
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