It seems crazy that the system is using nearly 30% of the HD capacity for "system use", whatever that is. So do I have something wrong with my HD?http://support.microsoft.com/kb/911593/en-us
is the official breakdown.
"The total capacity of the Xbox 360 Hard Drive is 20 GB. Of this amount, approximately 7 GB is reserved for system use. Approximately 4 GB of that portion is reserved for game title caching and other hard drive-specific elements in games that support the hard drive, and an additional 2 GB is reserved for use by the Xbox 360 backwards-compatibility software. This leaves you with almost 14 GB of free space, rounded down to 13 GB in the Dashboard, to save game files, downloadable content and music, and other media.
Depending on the market, the hard drive comes preloaded with content, such as videos and Live Arcade games. Therefore, actual free space on a new hard drive may be 11 to 12 GB."