I don't think this offer will be enticing to anyone, but hey... I thought I would pass it on.
I think it's marketing genius on the part of MS. My nephew works for a rental place and they milk over a grand out of such a setup before they retire it. Lots of folks are willing to amortize the cost of a cell phone over a contract period for service, so I'm sure this will be a fairly successful program for MS. It'll also allow easier entry for folks with lower incomes, who might otherwise use a high interest credit card to pay for a setup, which would probably end up costing as much in the end, even without the Live service. It'll be interesting to see how it affects the adoption numbers for the console.