well and HD movie clocks in at around 9Gb i think, so you really need the larger Hard drive of the Elite if you're going to use it seriously.
Depends how you define 'serious'.
You could still easily get the same use and functionality if you have the 20GB drive, compared to someone with a 120GB drive. As long as HD stuff doesn't go above 10GB+, and you delete the content once you've viewed it, then you would be able to download anything, and still keep some demos & other content on the HDD at the same time.
TBH even with 120GB, I would still probably just delete something once I had watched it, so it kinda makes the extra space irrelevant. You certainly don't need the Elite to make good use of the HD content.