Well, it's no hard drive (then again, it's certainly no air conditioner unit
). Nintendo has revealed its answer to the Wii storage solution by allowing for software to be opened directly from (and downloaded directly to) an SD card. That will give you 2GB of storage per card swap. We expect a megaton amount of DRM to try and keep the games linked to one console at a time, though.
An update implementing the change is reportedly coming Spring 2009.