Hmm...are you positive? That is unbelievably cheap.
Mine was $399.99 (400 lol) And it was 20 gigs, the best at the time. Its also the crap kind which RROD's easily. Luckily I haven't had any problems until recently though, so I must be treating it well.
Excuse me, I just checked the box and it comes with 256MB.
What it excludes are the Headset, which I don't need, the Network Cable, I bought my own, and the HDMI Digital AV Cable, which I plan to buy.
It also lacks the ability to play XBox games, which I don't really care about playing anyway.
As for memory, I can always buy a new memory card as I need it, and I have an external hard drive that I'm supposed to be able to transfer data to.