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Actually we don't even need Nancy Drew, she is a floozy anyway. This case is solved. Microsoft's cheapness is being dumped on the consumer. The 20GB hard drive that comes with the premium edition Xbox 360s is only showing up 13GB of available space. Those missing 7GB are being used for the backwards compatibility of the 360. This is because Microsoft used the Nvidia GPU for the original Xbox, and now that they have switched over to ATI for the 360, that Nvidia GPU has to be software simulated to properly play original Xbox games. Nice one Microsoft, real classy.

Xbox 360, only 13GB Available Diskspace [Datafuse]