No. 256 MB is completely insufficient for an Xbox 360 system drive.
| Use Case | Minimum Recommended |
|---|---|
| Saves + Profile Only | 256 MB MU (Works, but tiny) |
| Few Arcade Games + DLC | 20 GB HDD (Official) |
| Disc Game Installs (1-2 games) | 60 GB HDD |
| Full Library / Media Center | 250 GB - 500 GB HDD |
256 MB is a Memory Unit capacity, not a Hard Drive capacity. You need a Hard Drive (or large USB) for a functional modern 360 experience.