I'll be happy with the Core. Whenever I get one...
The core is more of a rip off when you consider the need for memory cards and the fact that you will eventually have to buy a hard drive, anyway (for best performance, DLC, and backwards compatibility, it's pretty much required). You may as well shell out the extra hundred bucks for a non-crippled system and the extras that come with it.
The elite probably isn't worth the money for most people. The HDMI port is already gimped by bing a 1.2 port instead of the 1.3 that comes standard with the PS3. Lower bandwidth, no support for the more advanced color spectrum, and the lack of support for Dolby TrueHD and DTS-HD Master Audio streams makes it barely better than simply sticking with component cables.
As for the extra hard disc space, most people won't need it. Microsoft already severly limits most DLC and most games aren't going to make use of the hard disc for anything beyond gamesaves. While it may be necessary to have a hard drive, a 120GB drive is overkill unless you're hoping to make your machine into a media center. Unfortunately, the 360 isn't a great device for playing audio or video files and the connector software for the PC is for the most part pretty useless. The 120GB drive is most likely intended for their new recording service, but much like Tivo, you have to pay for it. I find it incredible that Microsoft is willing to offer services for free to people who buy PCs and then they turn around and force you to pay for the same services on the Xbox.
Not to mention the wonderful ripoff that is Live where people pay $50 a year for a matchmaking service. You aren't even paying for game servers since most games are peer-to-peer with one of the player's systems serving as the host. With MMOs and other games which require dedicated servers, usually the developer/publisher supplies those servers, not Microsoft.