Okay I think this tutorial was not here so i decided to Make one for those that does not know you can. (I did not invent this method but merely sharing knowledge) Thank the people that made the tools that make it happen. This is for NORMAL Xbox360. You do not need a Jtag/RGh system to do this.
Anyone can do this in Ten mintues or less. And will not void the warranty on your system.or prevent you from going online. This is to Create an official xbox360 Hard drive (SATA) that you can plug in to the Side of the Xbox. (Not a USB Flash Drive or the internal 4GB.) VERY IMPORTANT The xbox 360 hard drives are SATA so You need a PC that has the hard drives connected with SATA as well, or you will need to buy the SATA to USB wire or DOCKING STATION. There are 20GB/60GB/120GB/250GB/320GB all the way to 750GB. Are the options for non Jtag systems. You system will only recognize 320 so if you get a 750 you will have to split it into two partitions so like having two 320GB First step is to gather your supplies.
Download Center 2.0; Xbox 360 60GB Hard Drive Security Sector Download (HDDSS.BIN) (HDDSS_60GB.BIN) add 250gb hard drive to xbox 360. Now Download Xbox 360 320GB Hard Drive Security Sector Or the Download Xbox 360 250GB Hard Drive Security Sector and Blue 250gb hard drive. HDDHACKR v1.40 Build 20130303: format your WD Drive into. Xbox 360 160gb Hddss Bin >>> DOWNLOAD (Mirror #1) 4c5316f046 free full download hddss.bin for 160gb toshiba from AYS search results.We have many downloads related to hddss.bin for 160gb toshiba which are hosted on sites like. Xbox 360 500gb hddss.bin,. Yes I would like to see a 500GB HDD working on a retails 360 also.
PC with Windows XP service pack 3 or later, Win Vista or Win 7. The PC must have SATA port on the Mother Board so you can plug the HDD into it. If you have a older machine (some XP) does not have SATA so you need a SATA to USB wire adapter ($20) or a SATA DRIVE docking Station ($40). 
I Prefer a docking station as it is super easy. Just plug the docking unit to your PC with USB then just stick the HardDrive in to the station and you are done.
FOR PEOPLE that dont know Devices on PC used to be IDE wire, so old PC will have this new PC are already SATA. For people that dont have SATA or you dont want to bother opening the PC then just get the Docking Station or Sata/USB wire converter. You need a Hard Drive and only these will work as they are the same ones that Microsoft designed to use with the system. You can pick from the sizes mentioned above.
Depends on how much you can afford. I say go get atleast 320GB and be done with it.online can be cheaper.