Halo: Reach was released exclusively for Xbox 360 yesterday, and it is easily the most anticipated Xbox 360 exclusive of the year. One of the game’s draw cards is its campaign co-op feature, which allows players to play through the campaign with a friend.
Sadly, the newly released 4GB Xbox 360 Slim console does not support this mode, supposedly due a lack of storage which is required to cache certain levels and game code.
From the Halo Reach Xbox Page:
Q1: The error “One or more players do not have an Xbox 360 Hard Drive. An Xbox 360 Hard Drive is required to play co-op on Xbox LIVE or system link” occurs when I try to play. Why?
A1: One or more players do not have a certified Xbox 360 hard drive attached to their Xbox 360 console. Some multiplayer aspects of Halo: Reach require an Xbox 360 certified hard drive.
Apparently, adding a USB storage drive does not resolve the problem. Furthermore, additional reports state that the same problem occurs in Halo 3: ODST.
Microsoft told Eurogamer that they “are aware of the issue and are quickly working to resolve it.”