I've never heard of so many different versions of the same console coming out within it's lifetime.
Xbox 360 Basic
Xbox 360 Premium
Xbox 360 Elite
Xbox 360 Halo 3 Edition
Xbox 360 w/ HDMI & 65nm
Xbox 360 Arcade
I think that's it...
To be fair the Halo 3 Edition is just a paint job like the PS2 which came in every color under the sun, its still just a premium. The arcade edition is just a bundling of games and accessories which has been done before as well, its still just a core. Going to 65nm isn't unusual either, the PS2/GameCube/XBOX went through plenty of internal hardware changes. Its part of the console lifecycle to cut cost and improve upon the product.
Really M$ has:
XBOX 360 core
XBOX 360 core w/HDMI
XBOX 360 Premium
XBOX 360 Premium w/HDMI
XBOX 360 Elite
Sony has:
PS3 20GB (Hardware BC, 4 USB)
PS3 40 GB (No BC, 2 USB, WiFi?)
PS3 60GB (Hardware BC, 4 USB, WiFi, Memory Card Reader)
PS3 60GB Euro edition? Software BC?
PS3 80GB (Software BC only, 4 USB, WiFi, Memory Card Reader)
And their not done yet... 160gb?