halo 3 is quite cheap in a used game store. or rent it, it's not that long (and the multiplayer gameplay without the ODST multi disc is going to be poor).
gears 2 has been one of my favorite shooters, thanks to the addition of horde mode. i'm sure gears 3 will continue that trend.
fable 2 is excellent fun. it's long enough to merit a purchase, and costs about 20$ in most game stores.
now that the arcade unit's 150$, used sale prices will drop precipitously. i already could get an arcade for 130$ before this that still had a manufacturer's seal, so i'm assuming that'll drop to around 110$ or so. 20-30$ for a used 20g hard drive (unless you aren't going to be getting downloadable games, most of which are only ok but there are some real jewels) and you're set.
at this point, i'd be incredibly surprised if the new slims had any hardware issues at all, really. the biggest bane of these systems is heat, and it's completely gone. beyond that, you've got simple stuff like true hardware failure (which is very unlikely nowadays, 3-5% for modern consoles over 3 years), disc drive failure (around the same, probably 2-3% over 3 years), and stuff like that. i'm not foreseeing a lot of issues.