Avatar customization and NXE requires 256MB storage [update 3]

Update 3: Clarification! Major Nelson clears the the confusion.

Update 2: Some clarification. The release mentions that (at minimum) a 256MB memory card is required for the NXE and Avatar customization, BUT doesn't say how many MBs out of the 256MBs are needed for the update itself. Technically, the update could use up only 150MBs leaving 256MB memory card owners with some extra storage. What's guaranteed is that 64MB card owners or those who have no storage medium are out of NXE and Avatar luck.

Update: Upon further investigation, Microsoft's press materials state; "The New Xbox Experience is available this fall through a free download to anyone with an Xbox 360 system, a broadband connection and a storage device of either a hard drive or 256MB memory unit or larger." So, we guess the entire NXE update will require an additional 256MBs of storage and Avatar customization will be a part of the NXE package.

Ninja-snuck in towards the bottom of Microsoft's TGS08 press release (the one that talks up the New Xbox Experience), we spotted a curious disclaimer regarding Avatar customization and it requiring 256MB of HDD / memory unit storage.

Verbatim, the Avatar disclaimer reads "customizing avatars requires a 256 MB memory unit or greater" which really isn't that big of a deal, unless you are a Core or Arcade 360 owner. 256MB of storage would mean that Core owners are totally out of Avatar customization luck (though, we doubt they care) and Arcade owners would have to max out their bundled 256MB memory card. That means our Arcade friends would have to choose: Avatar customization or saving game progress. Decisions, decisions ...