The new Arcade will also feature built in wireless and 4GB of memory. It's a lot better than the 256MB embedded memory on the later model Arcades and for most gamers that won't be downloading a lot of DLC and simply need a place for saved games, it should suffice.
There's also the option of using a 16GB USB key as well. This new model will be available on August 3rd for $200.
If Kinect is something you want to get your hands on this holiday season, Microsoft has a pre-order special which bundles the new 4GB 360 along with Kinect and Kinect Adventures for $299.
Here's the official statement from xbox.com:
Pre-order Kinect or the Xbox 360 4GB Console with Kinect today, and at launch receive a token to download three exclusive game levels for Kinect Adventures, the game included with Kinect.** In Kinect Adventures, you and your friends will explore the world—and beyond—through 20 active adventures to achieve the ultimate status: Expert Adventurer!
* Two exclusive levels of Rallyball—"Chomper" and "Twisters"—where you challenge multiple waves of spinning and chomping Rallyball patterns!
* One exclusive level of Reflex Ridge, "Champion," where you dodge obstacles, collect pins and race against time.
* An exclusive Kinect Adventures Helicopter prop for your avatar.
**Download tokens included in marked packages at launch, at participating retailers, while supplies last. 80MB is required to download from Xbox LIVE.