Where does an XBox 360 store it's dashboard, is there internal flash memory?

phusion

New member
I recently got a new XBox 360. The hard drive is in the mail, and not here yet. I got it connected to the internet, and it suggests there is a console update available. It doesn't not allow me to install it since there are no memory devices attached. I'm considering getting a memory card today while I wait for the hard drive as I find it will be useful later. Since the update suggested that it requires 256MB of memory to install, does that mean it installs to a HD or memory card, or does it simply need a place to download the file to before it gets sent to the system. I wouldn't want critical system files installed to a portable memory card. Is there internal memory on the 360 that is reserved for the console's dashboard/OS?
 
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