This just in from Major Nelson on skype:
The Cheapest price for Xbox will have a 20 GB HD and a wireless controller. You cant expect to log onto Xbox Live without a hard drive. Xbox Live is one of the pivotal features of the Xbox 360 console. Also we announced the wireless controller will be standard as the wired controller that you saw in pictures is used for security purposes in gaming conventions and public viewing. LA Times reporting is wrong, I will post about this on my blog later on in the day.