It's for both, and fuck the laser drive I shouldn't have to care. It's their faulty product. I don't want to pay them for more HD space just so I can make sure my 360 won't crap out.
Well, one game takes about 5 GB, you really don't need to install EVERY game... just the ones you usually play for long periods of time.
It works nice for me because I only usually own about 2 360 games at once.
Like, I have Gears 2 now... but once I beat the game on Hardcore Co-op I'm done with it and so I don't really need the HD space.
MK vs DC is downloaded onto my HD because I know I'll be playing it forever.
Regardless of the shitty product, it really was a smart move by Microsoft to include that in the new dashboard update.