id say aracde, wether or not you plan on buying a hard drive. ive had a premium (pro) 360 in the past when they were pretty expensive, and i kept the hard drive, so all i had to do was buy an arcade and i pretty much had a premium 360 again. theres a deal on xbox website, u pay $30 and get 20gb hard drive plus 3 months free gold, which is a beauty deal!
also about gears 2...one word AMAZING. The storyline is excellent, and the multiplayer is just superb. The mutliplayer keeps you coming back for more and more!