I'm surprised Microsoft has ditched market segmentation for the new Xbox 360 SKU, though at this point in the game: with only 2 to 3 more years left before a new generation product comes out, I can see why they wouldn't want to spend money like that.
The smaller size is welcome, but I'd have thought they'd have learned their lessons from Sony: not to use glossy black plastic for the case as it just shows fingerprint marks. I was hoping for an Xbox 360 Elite-style matt black. I'm also not keen on touch-sensitive controls: they're a gimmick and provide no tactile feedback, I also can't fathom how they would be cheaper too.
I've seen the fingerprints argument raised in a number of places, and I can't understand how this can possibly be an issue. I've never touched any part of the xbox apart from the power and eject buttons since I took it out of the box and put it down. Why do all these people keep picking up their consoles?
I wish the new 360 came in the classic white color, though. Currently it blends really well with my tv cabinet. Maybe this means I'll be in the market for... a faceplate?
The touch buttons I've never been a fan of. Like W3bbo said, they serve no purpose whatsoever and they're less useful than physical buttons.
Apparently the new 360 goes 'ping!' when a disc is inserted. Like a microwave. For some reason I love that idea.