Yeah, it is / will be possible to use the xbox as a storage server. Some companies have considered using a cluster of xboxes, with different hdds, and that way save costs. It might also be possible in the future, with linux installed, to run apache on it and that way reducing downtime seeing as how you only need to turn it off and back on again.

If you check www.slashdot.org's archives you can probably find some elaboration.

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