New owner of an Xbox 360 Elite? Well, if you were planning on transferring your Xbox Live Arcade games along with the rest of the data from your old 360, think again. There seems to be a major problem with how the transfer kit imports the games, involving DRM--yes, even games now suffer from this poorly thought-out technology. After a successful hard drive transfer, all of your purchased Arcade games will magically downgrade to demos. In order to have full access to these games, you must sign into Xbox Live (thanks to Joe at The Pensive Gamer for pointing this detail out).
Even more upsetting is that the DRM woes aren't exclusive to Xbox Live Arcade games. It seems that any movie or TV episode you've downloaded and transferred is susceptible to viewing limitations. In order to watch a television show, you must also be connected to Xbox Live in order to verify your identity. Microsoft is now recommending against performing a data transfer should you ever desire to view your shows offline.
As far as movies are concerned, all hope is lost. Any movie transferred using the kit cannot be viewed at all off the new hard drive. And what was Microsoft's actual solution to this issue? Watch your movies before you transfer your data.
In light of all the recent trauma, the transfer kit is currently being offered free from Microsoft by filling out this PDF form.