the xbox 360 was ment to use real time generated procedural graphics, which are fed directly to the gpu in real time, rather than loading and storing big data all in memory like pc games do. the video memory is all frame buffer, theres not enough to do anything else other than maybe storing shader programs. even then the frame buffer would need to use compression to handle hd resolutions (ntsc's 720*480 would use 8.9 megs of uncompressed memory).
im pretty sure programming a game on the 360 would throw out all classical conventions of game design out the window. rather than building the world by xforming your models to world space, storing it, and xforming the whole world to camera space, storing it again, the world is probibly done in sections, then overlapped right onto the frame buffer. first ground, then buildings, then trees, then characters,ect, each following the old convention. i dont think freespace is set up to handle it.
