The main advantage from the 360 Elite is the HDMI output that lets you enjoy 1080p instead of 1080i gaming. The 65nm chip is a rumor. The bigger hard drive is nice but Thats not why im buying it, im buying it for the increased visual quality that will come from the HDMI port however minor. If you buy a 2k tv that supports 1080p, to play at 1080i is a slap in the face. The extra 80 dollars is worth the money to get the most of of your tv and your 360.
Unfortunately, while the XBOX360 elite will come equipped with an HDMI port, the digital output chip used in the system is the same, so the XBOX360 STILL will not support 1080p, even with HDMI. This is however, an indication that they will release a revision of the system with 1080p support. Just becuase the interface is supported doesnt mean that the output is 1080p.
Just so we dont have incorrect info here... agentsmith957 needs to clarify his comment. I have a 360 (non elite) and I also have the HDDVD drive add-on. The HDDVD drive will output 1080p if you have the 360 plugged in via the VGA cables, not component. Now I've not yet tested an xbox game that has 1080p listed on the back to see if it does games like this, I will need to do this sometime. I can test this as my HDTV will list via the menu system what the source is coming in at ie 1080p, 1080i, 720p, ect. and when I watch a HD movie it lists 1080p.
My point is to say "XBOX360 STILL will not support 1080p, even with HDMI" only spreads bad info.