Is The Microsoft Xbox 360 HDMI Cable with Optical Audio Compatiable?
Yes. All Xbox 360 accessories are compatible with all Xbox 360 consoles (with the exception of the HDMI cables with the consoles before they added a HDMI port) The Xbox 360 Arcade has always had HDMI so the HDMI cable with the optical audio dongle will work fine.. you can also use any Xbox 360 hard drive (20GB, 60GB, 120GB or even then the newly announced 250GB) you just have to remove the cover plate from the end of your Xbox and snap the hard drive on. I have an Xbox 360 Arcade with a 120GB drive and it works great.. Good Luck..