Yes, it IS expensive for a hard drive, and YES it has been cheaper previously.
This is currently the cheapest available price online, and therefore I think it's worth a post.
* Fusion colour: The 120GB Hard Drive matches the style of the original Xbox 360 console and 20GB Hard Drive.
* Game saves: Even the most dedicated of gamers could spend a lifetime trying to fill up 120GB with game saves.
* Music: Rip CDs to the hard drive with reckless abandon and no concern for space constraints.
* Videos: Xbox LIVE Marketplace offers a wide variety of video content from gaming and movie trailers to television programs and HD movie rentals.
* Pictures: Download gamer pics and dashboard themes from Xbox LIVE Marketplace or create your own with the Xbox LIVE Vision Camera. Keep a huge assortment on hand to suit any mood and whim.
* Gaming demos: As gaming demos become deeper and more detailed with stunning HD graphics, they also take up a lot more space... no longer a problem with the 120GB HDD.
* Xbox LIVE Arcade games: New games are being released weekly. Have no fear of owning them all with the massive storage option of the 120GB HDD.
If you don't have a 360, please don't vote cold just because its expensive for a 120gig hdd - this is a must have for a 360, you can't just slam any old hard drive into it, so yu're not comparing like for like...