Well of course everyone has said Halo 3, but theres also Mass Effect, Crackdown (a massively overlooked game, its really awesome), Gears of War 2 (whenever it comes out, should be soon), Bioshock (I can't get it, but the demo is awesome), Full Auto 2, Need for Speed Pro Street, Madden 08, any NHL game, Forza, Call of Duty 4 (obviously), and Guitar Hero III (omg sweet game).
Yeah thats a big list and all, most of them are M, but I usually can slide past my parents to get M.
Other reasons to get it are the new social stuff, where you can look at your friends friends, and make a biography and stuff, that will look really good as it comes along (should be like Myspace or Facebook eventually). There are downloads for original Xbox games now too, plus free demos for most of the new games. Xbox Live is the best invention to man since the sleep button. Xbox Live Arcade is massively improving for families and Christmas time. Music actually works, just plug in an mp3, disc, or memory stick and you can listen to it while you play. Awesome, really.
Yeah, you really need to get an XBOX 360 now.