Seeing as I am constantly struggling for space on my lauch date hard drive I have been thinking about what will happen to my old data if I eventually jump across to the Elite. Sure enough I can across a Twitter feed by Garnett Lee (1UP Network) talking about him transfering data on his console. A quick google search yielded the following article from Kotaku.

" In general, Microsoft expects only new users to buy the Elite, not current owners. But if you decide to buy a second you'll need the hard drive transfer kit. For those of you double dipping, Microsoft told Kotaku that they will provide a free migration kit through the site or customer service.

If you do plan to do the transfer keep in mind that:
Content can only be moved from the smaller drive to the larger one.
You can only do the transfer once.
Any content currently on the larger hard drive will be erased during the transfer
You have to redownload Arcade games and other Live purchases
The 20GB hard drive will be erased during the transfer
Once you load purchased Live games and TV shows you will have to be connected to watch them.
Movie rentals will not transfer, so watch them first.
Depending on the amount of data the transfer can take up to an hour

If you're OK with that you just attach the 20GB to your Elite, plug one end of the transfer cable to your 120GB hard drive and the other end to the USB port in the back of your 360 and then insert the disc the cable came with."

I like the fact that Microsoft are handing out free transfer kits. I am not sure about the fact that you still have to be connected to Live to play your redownloaded XBLA games as I heard a rumour that Microsoft can sort this out but only after you complain until you go blue in the face.

Now all that is left is for somebody to kindly donate a couple hundred pounds to my cause.