Now is the time for all cheap gamers to finally plonk down money for a 360. A $99 Xbox model is available right now from participating Best Buy and GameStop stores. The cheap machine comes with a tiny 4GB HD as well as a Kinect.
According to Microsoft's Major Nelson, "This next phase of the pilot program will be limited in terms of both timing and the number of units available," so don't sleep. They won't be around forever.
The price of the sub-$100 360s are "subsidized" by a locked in, monthly two-year, $15 subscription to Xbox Live, so there's a bit of a catch -- you're on the hook for two years of slightly more expensive Live service. Over 24 months, the savings will amount to $39 when compared to purchasing a 4GB 360 and paying a cheaper subscription fee for basic Gold membership. The new bundle will cost you $420 in two years, where a "traditional" 360 will set you back $459.
Source: Major Nelson